Ahead of the Scottish Budget on 13 January 2026, Propertymark has recommended that the Scottish Government should prioritise boosting housing supply, stating that failing to act now risks deepening Scotland’s already critical housing shortage.
The Scottish Government has committed to building 110,000 homes by 2032, yet the latest Housing Quarterly Statistics to the end of September 2025 shows a slow-down in building. There were 14,225 private sector led housing completions and 11,815 properties started. Private sector led new build completions and starts have decreased by 5 per cent and 3.2 per cent respectively in the year to the end of September 2025 in contrast to the prior year to the end of September.
Excluding 2020, what was built by private sector providers was the lowest since the year ending September 2018, and starts were the lowest since the year ending September 2013.
These declining figures, combined with multiple Scottish councils declaring housing emergencies and a temporary accommodation crisis, demonstrate a picture of worsening supply at a time of rising need.
Tax policy risks deepening the crisis
Propertymark highlighted that any move to increase the Additional Dwelling Supplement (ADS), the surcharge applied to purchases of additional property, including a second home or a rental property, Land and Buildings Transaction Tax (LBTT) could further discourage investment in rental housing and contribute to pushing rents up for many tenants.
ADS has risen repeatedly in recent years, from 3% in 2016 to 8% today. Propertymark argues this trajectory discourages small and mid-sized landlords from investing in long-term rentals, reducing available homes in the sector and may lead to rising rents.
Scottish Finance Secretary Shona Robison, MSP, has pledged not to lift income tax in the upcoming Budget, but suggested those “with the broadest shoulders” may face higher taxes, prompting concerns that landlords could again be targeted via an increase in property surcharges.
Scottish Government’s own taskforce points to tax reform
The Scottish Government’s Housing Investment Taskforce Report, published in June 2025, identified two key pathways to accelerate house building:
- A planning system that genuinely enables more homes to be delivered, and
- A comprehensive review of how taxation can support housing investment.
Propertymark says this review must happen as a priority, as any slow or partial approach may risk creating an unequal landscape where large institutional investors benefit from tailored reliefs while smaller landlords face increasing financial pressure.
In August, Ministers launched a consultation on aligning Land and Buildings Transaction Tax reliefs for investor schemes with those in England and Northern Ireland. Propertymark welcomed the move but stressed the need for equivalent support for individual landlords to ensure a balanced, sustainable property market.
Propertymark: rising costs are pushing rents higher
Timothy Douglas, Head of Policy and Campaigns at Propertymark, said:
“Propertymark has consistently highlighted the damaging cumulative impact of rising costs and property tax surcharges on Scotland’s private rented sector. These pressures ultimately fall on both landlords and tenants.
“If investment continues to decline while reforms stall, rents will keep rising.
“However, we stand ready to work with the Scottish Government to develop a fair, effective tax framework that enables all types of investors to deliver the homes Scotland urgently needs.”
