The latest data from HomeLet shows that Scotland has seen a 5% increase in average rental values over the past 12 months, at £654 per month.
Scotland’s 158,505 landlords provide 414,000 properties yet pay substantially higher sums both to buy properties and in personal taxation than their counterparts south of the Border.
The importance of the PRS in Scotland is highlighted by its growth over the last two decades.
Between 1999 and 2018 the PRS in Scotland has grown from 5% to 14% of total housing stock whilst social housing has declined from 32% to 23% over the same period.
David Alexander, joint managing director of apropos by DJ Alexander Ltd, commented: “These figures highlight the importance of the PRS in providing homes for hundreds of thousands of people across Scotland.
“At a time when landlords income is being severely squeezed by the loss of tax reliefs on borrowing introduced by George Osborne, the increased cost of borrowing introduced by the Prudential Regulations Authority, and the reduced potential profit when property is sold due to loss of capital gains tax relief, the result is that many landlords face a challenging financial environment.”
Alexander added: “The tax liability in buying a rental property is substantially higher in Scotland than the rest of the UK.
“A landlord buying a home for £200,000 in Scotland will pay £9,100 in land and building transaction tax [LBTT and ADS] whilst the same purchase in England would cost just £7,500 in stamp duty land tax (SDLT). Equally the personal tax liability is much higher in Scotland.
“A Scottish landlord earning £50,000 per annum will pay £1,545 more in personal tax than in England.”
The Scottish government is to announce its draft Budget plans on 6 February.
Finance Secretary Derek Mackay will set out his tax and spending proposals a month ahead of the UK Budget, which will not be published until 11 March.
Mackay said it would have been "impossible" to wait for the UK Budget as usual while councils and public services need clarity about funding.
The provisional timetable will see the Budget bill pass through Holyrood in a matter of weeks in a bid to make sure it gains royal assent in time for tax provisions to take effect from 1 April.
Mackay commented: “In these exceptional circumstances, created by the UK government, it is vital we give local authorities and public services clarity on their budgets. That is why we have made the decision to publish our budget in February which will allow local authorities to set their budgets and council tax before the legal deadline of 11 March.”
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