Scotland’s largest membership body for private landlords has expressed concern that tax changes announced by the Scottish Government will reduce investment and exacerbate the country’s housing crisis.

The Scottish Association of Landlords (SAL) has criticised the decision to increase the Additional Dwelling Supplement (ADS) portion of the Land and Buildings Transaction Tax (LBTT) levied when a property is purchased amid complaints from members that it will lead to a decrease in investment and fewer high quality homes being available for rent.

In his Budget on December 12, finance secretary Derek Mackay MSP announced an increase in the ADS from 3% to 4% from next year.

While yesterday ESPC Lettings head, Nicky Lloyd argued that the move is unlikely to deter landlords in Edinburgh, SAL believes the increased purchase cost is likely to mean fewer landlords buying and modernising homes across the country.

Statistics show that the tax take from ADS has doubled since the start of 2018, from £6 million in January 2018 to £12.2m in October 2018, the most recent month for which statistics are available, and SAL is becoming increasingly worried that the tipping point at which landlords can continue to absorb such costs will be breached by further increases.

John Blackwood, chief executive of the Scottish Association of Landlords, said: “We know there is a housing crisis in Scotland, as well as public concern about the number of homes available for private purchase. However, in many parts of Scotland, the only people buying properties and modernising them are private landlords who then make them available for rent which is often the most desired type of housing in these areas.

“We have already seen the tax take from ADS more than double over the course of 2018 so this latest increase risks landlords being seen as a cash cow for government which they most certainly are not. Our members, mainly landlords hold a small number of properties, operate their businesses on very tight margins so any increase in cost is likely to lead to a decrease in investment.

“We want to see effective investment in all types of housing in Scotland be that new build, social housing or the private sector to ensure the right balance across Scotland which effectively tackles the housing crisis.”