The Scottish Budget delivered a blow for landlords and holiday homebuyers, introducing a 1% increase on the tax payable when buying a second property.
If the proposal is approved by the Scottish Parliament, the rate rise will come into force from 25 January 2019.
Which? explains the change and what it means for your money.
The Additional Dwelling Supplement (ADS) was introduced around the UK on 1 April 2016 and is payable when you're buying a second residential property (in addition to your main home).
But in today's Budget speech, the devolved Scottish government proposed raising the LBTT surcharge from 3% to 4%.
LBTT is a tiered tax, meaning you pay different rates on different portions of the property price. This table shows the rates:
|Portion of property price||Standard residential LBTT rate||Current ADS rate||ADS rate from 25 January 2019|
|Properties worth less than £40,000||-||0%||0%|
The change means that a buy-to-let landlord purchasing a home for £250,000 will see their bill rise from £9,600 to £12,100.
The Scottish Government says the increase to the surcharge is an important part of its drive to support first-time buyers and assist people as they move up the property ladder.
The Commission forecasts the tax revenue raised from increasing the rate of ADS will be £2.3m in 2018/19, rising to £25.4m in 2019/20.
If you're buying a property in Scotlandyou will normally have to pay Land and Buildings Transaction Tax (LBTT). This replaced stamp duty land tax in April 2015, but many people still refer to it as 'stamp duty' or 'Scottish stamp duty'.
LBTT is applied to residential and commercial land and buildings transactions.
Like stamp duty, LBTT is a tiered system, but the rates and property pricing bands differ from the English and Welsh systems.
The Scottish Government's plan to increase the ADS rate will come into force from 25 January 2019 if it is approved by the Scottish Parliament.
However, the 4% surcharge will not apply if the contract for a transaction was entered into prior to today (12 December 2018).
Your home may be repossessed if you do not keep up repayments on your mortgage.