An increased role for land and property taxation could support Scotland’s economic recovery and land reform objectives, the Scottish Land Commission claims in a report published today.

Part of the Commission's strategic advice to the Scottish Government, the report concludes that while "most of the significant tax levers in relation to land" are reserved to Westminster, there are opportunities for the Scottish Government to progress taxation reforms that would support land reform objectives and national priorities.

It notes that while 50% of the UK’s wealth is tied up in land and property, it only forms around 10% of the total tax base. In Scotland, just 12% of all public sector revenue across reserved and devolved taxes is raised through taxes fully or partially levied on land and property.

Identifying changes to the tax system, the report states, could help regenerate town centres, ensure that the move to net zero is a just transition, deliver wider benefits for local communities, and support a more diverse pattern of land ownership.

First, it recommends that the Government establishes a programme to bring all land onto the valuation roll, and commits to developing a comprehensive approach to integration of information on land ownership, use and value, building on the current work of Registers of Scotland.

Secondly, the Government should consider the potential role of land and buildings transaction tax in relation to "shaping the land market in a just transition", while seeking to engage on a UK basis on the potential for a more progressive approach to reliefs and exemptions to support diversification of ownership.

Additional reliefs on non-domestic rates and council tax could be given for newly built properties on longstanding vacant sites, to incentivise reuse; while non-domestic rates could be applied to newly derelict properties to discourage them from being allowed to fall into disrepair.

Taxation could also be used to secure "a productive balance of public and private benefit from future carbon values"; and further engagement on a UK basis could seek a more progressive approach to the use of reliefs and exemptions in relation to land, including potential for an income tax relief to support letting of agricultural land.

The Commission acknowledges that these proposals "will need detailed modelling and consideration of the scope and resourcing implications".


Chief executive Hamish Trench commented: "Land is our most valuable asset and Scotland has scope to tax land in ways that better support the Scottish Government’s policy priorities, but this needs to be considered in a careful way that acknowledges the complexity and devolved powers.

"This report sets out steps that can be taken to steadily increase the role that land value plays in taxation, as well as specific reform opportunities to tackle priorities including derelict land regeneration and a just transition.

"Tax is a potentially significant influence in delivering Scotland’s land policy objectives and we recommend an ongoing programme of reforms. Discussing changes to taxation often attracts passionate debate and strong views; our international research has shown how important direct public engagement is in discussion and consideration of the options for changes in land taxation. That is why we also advise that a national conversation needs to happen to help build consensus on the options for taxing land and making the most of Scotland’s land."

Click here to view the report.