Tax hikes will worsen Scotland’s housing crisis, landlords warn

The Scottish Association of Landlords (SAL), which represents landlords in Scotland, issued the warning following the recent UK Budget and ahead of the Scottish Budget, due on 13 January 2026. 

Chancellor Rachel Reeves announced that a 2% increase in income taxes levied from property will hit landlords in England from April 2027, with the same hike due for income from savings and dividends from April 2026.

Scotland’s landlords are concerned that cabinet secretary for finance and local government, Shona Robison, is preparing to hammer the private rented sector (PRS) in Scotland with a similar tax when she delivers her Scottish Budget. 

SAL believes that property income tax will discourage investment in Scotland’s PRS, resulting in fewer properties being available to rent as landlords leave the sector. 

At First Minister’s Questions last week, Scottish Conservative leader Russell Findlay raised the issue, asking John Swinney if he accepted that “new tax could further damage the rental market for tenants?” 

Recent policy shifts, including impending rent controls, have resulted in many Scottish landlords, 90 percent of which own one or two properties, considering reducing their portfolios or leaving the sector entirely.

Amid the current housing crisis, SAL urges the Scottish Government to incentivise investment in the sector and work with landlords to increase the supply of housing available to create a PRS that works for all. 

SAL chief executive, John Blackwood, said: “If the cabinet secretary chooses to follow the Chancellor’s lead by imposing additional taxes on Scotland’s landlords, she will actively worsen the housing crisis. 

“Many landlords in Scotland are already considering reducing the size of their investment or leaving the sector entirely, taking their properties with them. 

“Rather than making investment less attractive, Shona Robison should work with landlords to encourage investment to help us create a private rented sector that works for everyone.”