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What homeowners should know about what’s expected in the Scottish budget

The measures put forward by Chancellor Rachel Reeves see Scotland with an additional £3.4bn through the Barnett formula, which "must be used effectively in Scotland to deliver the public services that the people of Scotland deserve". 

Shona Robison, the finance secretary at Holyrood, has until her budget statement on 4 December to allocate that and consider other sources of revenue, including Scottish income tax. 

She has to put together a budget that can win the support of an opposition party by February 2025. If she cannot do that, there could be an early election. 

Here’s what to expect on the 4th December...  

Income Tax: 

  • Homeowners earning over £28,567 in Scotland pay more income tax than in other parts of the UK, while those earning less pay slightly less. 

  • Tax bands are unlikely to change, but "fiscal drag" could push more people into higher tax brackets if bands aren’t adjusted for inflation. 

Council Tax: 

  • The council tax freeze introduced this year may continue into 2025-26, offering potential savings for homeowners. 

  • Critics argue the freeze strains local services and is based on outdated property values. 

Winter Fuel Payments: 

  • Means-tested winter fuel payments mean fewer pensioners will qualify, potentially impacting household budgets. 

  • There’s hope that increased funding could reinstate universal payments, but this remains uncertain. 

Business Rates: 

  • Calls for matching business rates relief seen in England could reduce costs for small business owners, but funding for such measures remains tight. 

Impact on Property Decisions: 

With tax bands and council tax potentially staying static, property buyers and sellers may face fewer immediate financial changes. However, ongoing financial pressures on local services could influence long-term property values and the desirability of certain areas. 

Winter fuel costs and broader economic uncertainty may also shape how homeowners budget for moving or upgrading their homes.  

Despite what may or may not transpire following the budget on the 4th December, the Scottish property market remains strong. Recent research highlights that no less than eight of the top 20 best performing markets are located north of the border. 

If you have any questions, or would like advice regarding the budget, please do contact our team today.  

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