Land and buildings transaction tax is ill-conceived

The increase in Scotland’s land and buildings transaction tax (LBTT) is inconsistent with any sensible tax strategy according to annual Scottish Budget report from the Institute for Fiscal Studies (IFS).

Scotland’s Budget for 2025-26 included an immediate increase to the additional dwelling supplement (ADS) on the purchase of second and rental homes from 6% to 8%. This replicated an increase in England and Northern Ireland’s equivalent stamp duty land tax (SDLT) surcharge from 3% to 5% but says the report in both cases the move makes an already highly economically damaging tax even worse.

Despite the publication of a tax strategy alongside the Scottish Budget the report says it is not yet clear what the Scottish government’s vision for tax policy is – but increases to LBTT are not consistent with any economically sensible strategy.

The report says the change...