What the UK Budget Means for Scottish Landlords

And Why All Eyes Are Now on the Scottish Budget in January

The UK Government’s 2025 Budget delivered one major headline for landlords, a proposed 2 percent increase to income tax on property income from April 2027. However, this change does not apply to Scottish landlords unless the Scottish Government decides to mirror it.

In Scotland, income tax on property income is fully devolved. That means decisions on tax rates, bands and thresholds for landlords sit entirely with Holyrood, not Westminster. Any changes affecting Scottish property income tax will be announced in the Scottish Budget on 13 January 2026.

For the moment, Scottish landlords’ income tax rates remain unchanged.

 

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What Did the UK Budget Actually Announce?

The Chancellor confirmed that income tax on property income will increase by two percentage points from April 2027. This applies to taxpayers in:

• England
• Wales
• Northern Ireland

It does not apply to Scotland unless Holyrood chooses to replicate it.

The Budget also confirmed tax increases on savings and dividend income.
These do apply UK-wide, including Scotland.

 

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What Does This Mean for Scottish Landlords Right Now?

1. No change to income tax on rental income in Scotland

Landlords in Scotland do not face the confirmed 2 percent rise.
Your current Scottish income tax structure remains in place.

 

2. But the Scottish Government may still choose to introduce the same increase

SAL has highlighted that Holyrood could replicate the 2 percent rise.
We will not know until 13 January.

 

3. Industry bodies expect potential increases

SAL and OBR analysis both warn that tax rises could:

reduce landlord returns
• place pressure on rents
• discourage investment
• reduce the supply of rented homes over time

Given current housing pressures in Scotland, this is a key concern.

 

4. Nothing changes today, but planning ahead is wise

Even if tax rates stay the same, landlords still face:

• • rent controls under the Housing Bill
  • rising repair and compliance costs
  • increasing enforcement by local authorities
  • tighter profit margins for mortgaged landlords

This makes strong management and accurate pricing increasingly important.

 

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What Could the Scottish Budget Include?

Based on policy signals, here are the most likely areas to watch:

 

Income tax on property income

• Scotland could copy the 2 percent increase
• Scotland could freeze or adjust thresholds
• Extra bands are also possible

 

Rent control support

• Funding for enforcement
• Guidance for Rent Control Areas
• Potential for Edinburgh to be targeted first

 

Energy and EPC measures

• Funding support
• Updated EPC timelines
• Incentives for improvements

 

LBTT or ADS adjustments

• Threshold changes
• ADS surcharge tweaks
• Investment-driven incentives

Tenant support and homelessness measures

These could impact tenancy management expectations.

Albany will publish a full breakdown the moment the details are released.

 

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How Albany Supports Landlords Through Uncertainty

Regardless of what the January Budget brings, our focus stays the same — protecting your property, your returns and your tenants.

 

🟩 Accurate Rent Reviews Within PRT Rules

Edinburgh’s rental market moves fast and rent controls add complexity.
We monitor live market conditions and guide landlords on:

• lawful rent increases
• market positioning
• tenant retention
• ensuring rent keeps pace with rising costs

 

🟩 Reducing Voids in a High-Demand City

Lower margins mean a void period hits harder.
Albany helps with:

• strong marketing
• high enquiry levels
• fast turnaround times
• proactive renewals

Every week saved makes a difference.

 

🟩 Protecting Property Condition

Unexpected repairs are one of the biggest threats to landlord profitability.

We support with:

• seasonal guidance
• boiler service reminders
• damp and condensation management
• maintenance planning
• contractor coordination

 

🟩 Full Compliance Support

Scottish legislation is detailed and constantly evolving.
We keep landlords ahead of:

• PRT rules
• HMO licensing
• alarms and electrical safety
• landlord registration
• repair standards
• rent control changes

 

🟩 Portfolio Planning and Strategy

Whether the Scottish Budget increases taxes or not, smart planning matters.

We support landlords with:

• yield reviews
• rent optimisation
• off market opportunities
• advice on underperforming properties
• onboarding for new purchases

 

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Final Thoughts

The UK Budget has raised taxes for landlords elsewhere in the UK, but Scottish landlords will not be affected unless Holyrood chooses to introduce similar changes. The Scottish Budget on 13 January will be crucial in determining what comes next.

Albany Lettings will continue to keep our landlords informed, supported and prepared.

If you would like a rent review or a portfolio health check, our team is here to help.