Tax raid on buy-to-let homes in Scotland

THE Scottish Government has unveiled a tax raid on buyto-let property investors after blaming Westminster for its ‘austerity budget’.

Finance Minister John Swinney introduced a fresh 3 per cent penalty for anyone hoping to purchase a buy-to-let or holiday home in Scotland worth more than £40,000.

It means a £9,600 up-front tax bill for a £250,000 second home – an increase from £2,100.

For a £500,000 purchase it will soar from £23,350 to £38,350.

Mr Swinney said the move was ‘proportionate and fair’, saying it would make it easier for first-time buyers to enter the housing market. Hailing his budget as a ‘Scottish alternative to austerity’, Mr Swinney also revealed that he will double the levy paid by nearly 30,000 of the country’s top employers in an attempt to generate £130million.

However, he was accused of backing out of using Holyrood’s new tax powers to end austerity. Instead, Mr Swinney chose to mirror George osborne’s spending policies rather than face a backlash from voters.

He warned middle-income families he will come for them after the Scottish parliament elections in five months’ time, vowing to introduce a ‘progressive’ system next year. In addition, he said counciltax rates would be frozen for the ninth year in a row in 2016-17

Mr Swinney also used his Budget to complain about cuts from Westminster, which he said have triggered a decade of realterm reductions. But the Government said Scotland had an extra £390million in cash terms in 201617, on top of a £347million ‘underspend’ from this financial year.