Greater clarity will bring more certainty around Scottish property

Savills said that while this surcharge does not impact Scotland, the Scottish Government Budget announcement on 13 January will clarify any changes to housing-related policies north of the Border.

The UK Budget also announced changes to tax on property income, with Westminster to create separate tax rates for the levy. From 2027-28, the property basic rate will be 22 per cent, the property higher rate will be 42 per cent, and the property additional rate will be 47 per cent.

These rates will apply across England, Wales and Northern Ireland. Westminster will engage with Holyrood to provide them with the ability to set property income rates in line with their current income tax powers in their fiscal frameworks. This will be legislated for in Finance Bill 2025-26, and take effect from 6 April 2027.

Savills says that despite speculation around tax reform, Scotland’s prime residential market continues to demonstrate strength. Its latest research shows a 10 per cent annual rise in net agreed sales above £500,000 during the third quarter of this year. Savills states this underlines the resilience of the prime residential market.

Key market highlights from Savills:

1. Buyer registrations for prime Scottish property are up 86 per cent compared to 2019.

2. Edinburgh’s West End and sought-after suburbs such as Bruntsfield, Morningside, Marchmont and Sciennes saw a 0.9 per cent rise in prime prices in Q3, leaving them 1.3 per cent higher year-on-year.

3. Glasgow’s prime urban markets recorded a 19 per cent annual increase in agreed sales above £500,000, with Pollokshields leading the million-pound market.

4. Country house markets remain more cautious, reflecting sensitivity to tax speculation and running costs, particularly in Perthshire.

Faisal Choudhry, head of residential research at Savills in Scotland, says: “Scotland’s prime market has been holding its nerve. While speculation around tax reform caused some hesitation, buyers remained active and sellers who price and present well are being rewarded.

“With the Chancellor’s statement now delivered, the speculation that caused hesitation in parts of the market is behind us. While it may take time for confidence to fully return, uncertainty is likely to lift in the coming weeks.

“We anticipate renewed activity as buyers and sellers adjust to the confirmed position. The fundamentals remain strong – motivated buyers are still in the market, and well-priced, well-presented homes in desirable locations will continue to attract competitive interest.

“Greater clarity following the Scottish Government’s January announcement should further support momentum into early 2026.”