Scotland’s capital remains a strong investment market, despite the recent changes announced affecting LBTT for landlords and ‘second home owners’.
Landlords have been planning for the increased rate of stamp duty / LBTT on buy-to-let properties a well as the cuts to landlord tax relief that come in to force this month, yet the majority of investors in this market feel that the buy-to-let market is still very profitable.
Those who invest in buy-to-let properties don’t view their property portfolios as a short term investment and are in it for the long term gains. Statistics from the Association of Residential Letting Agents (ARLA) show that the majority of landlords keep their investment property for more than one year – in fact, over a third of landlords keep their buy-to-let property for 11-20 years and for an average of 20.3 years. With house prices in Edinburgh predicted to continue to rise, most landlords will not find the new reforms have such as devastating impact as initially suggested.
In addition, many landlords are now looking at transferring their property investment portfolios into limited company vehicles, allowing them to benefit from lower tax thresholds.