‘Holiday homes conundrum is hidden Budget bombshell’

Rural land and property experts have issued a warning about a hidden potential time bomb for Scotland in John Swinney’s budget announcement.

Perthshire-based rural land and property agent Bell Ingram says the Scottish finance secretary’s tax hike for second home owners and buy-to-let landlords could wreak havoc on the traditionally robust rural holiday home sector north of the border.

Will Banham, an Associate at Bell Ingram’s Oban office, said: “The second homes sector is a crucial part of the property market across much of rural Scotland. In fact, it has been a significant factor in supporting property value and transaction levels through the downturn.

“This is particularly true throughout the rural west coast and the islands where the holiday home market represents a good proportion of total transactions and is an important part of the rural economy.

“Traditionally holiday homes in Scotland have been regarded as representing very good value for money when compared with other parts of the UK.

“However, at the moment the market is fairly static, so an increased tax burden on second home buyers will almost certainly force property values down and could have a chilling effect across the entire rural property market.”

In his budget announcement, Mr Swinney announced that second home buyers in Scotland will face a 3 per cent premium on top of their Land and Buildings Transaction Tax (LBTT). The move follows a similar announcement by the UK Chancellor last month.

Will Banham said: “Quite simply, a 3% rise in Land and Buildings Transaction Tax (LBTT) is bound to have a significant impact on the market in rural areas.

“With such a rise being introduced for second homes, inevitably there will now be a downward pressure on sale values to compensate for the change. In short, this could potentially become an additional barrier to buying and selling in what is already a static market.”

Established 112 years ago, Bell Ingram has 130 professional staff across 11 UK offices, including chartered surveyors, estate and forestry managers, architects, building surveyors, tourism and green energy specialists.