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The extra tax on a second home in Scotland and Wales

Scotland removed its cap on council tax premiums for second homes from 1 April 2026, and Edinburgh suspended its own 300% rate eight days after setting it (The Scotsman, 10 April 2026). Wales has allowed a 300% premium since 2023, and both nations also raised the tax charged on buying the property. The figures sit in a return an accountant already prepares.

9 min read · 6 October 2026 · Altro Partners, by Equity & General

300%
the council tax premium a second home can now face in Scotland or Wales
gov.scot, Local Government Finance Circular 6/2026; Welsh Government, in force since 2023
Reacting to

Edinburgh council suspends massive rise in council tax for second homes (The Scotsman, 10 April 2026)

Edinburgh set a 300% council tax premium on second homes in its February 2026 budget, charging owners four times the standard rate from 1 April. Eight days later the council suspended it and went back to the old 100% premium while it reviews the policy. The pause does not change the power councils hold. Every council in Scotland can still set a premium above 100%, Wales has allowed one up to 300% since 2023, and the tax on buying a second home rose in both nations before any of this.

What changed in Scotland

Until 31 March 2026, a Scottish council could charge a second home or a long-term empty home no more than double the standard council tax rate. Local Government Finance Circular 6/2026, published by the Scottish Government on 25 March 2026, removed that 100% ceiling from 1 April 2026 and left each council to set its own rate. Highland set 300%, Glasgow set 200%, Scottish Borders set 225%, and Midlothian set a graduated rate from 200% to 600% depending on how long a property stands empty. Edinburgh also set 300%, then suspended it on 10 April 2026 after eight days, reverting second-home owners to the 100% rate for the rest of 2026/27 while the council carries out a review expected to take six months.

That is the annual cost of keeping a second home. Buying the property already costs more too. Revenue Scotland's Additional Dwelling Supplement, charged on top of the standard Land and Buildings Transaction Tax whenever a buyer already owns a residential property, rose from 6% to 8% of the full purchase price for contracts entered into on or after 5 December 2024, as part of the Scottish Budget for 2025 to 2026. It applies above a £40,000 threshold and makes no distinction between a holiday home, a buy-to-let or a house bought for a grown-up child.

What changed in Wales

Wales moved first on the annual charge. The Council Tax (Long-term Empty Dwellings and Dwellings Occupied Periodically) (Wales) Regulations 2022 gave every Welsh local authority the power to charge a premium of up to 300% on a second home or a long-term empty property, in force from 1 April 2023. Gwynedd, Pembrokeshire, Ceredigion and the Isle of Anglesey are among the councils that have used a large part of that power, and the Welsh Government's own guidance sets out the limited exceptions a council can still allow.

The purchase tax also rose. Higher residential rates of Land Transaction Tax apply to an additional property in place of the main residential rates, and every one of those higher bands went up by one percentage point for transactions with an effective date on or after 11 December 2024: 5% on the first £180,000, rising in steps to 17% above £1.5 million. Because each band moved by the same point, the increase adds 1% of the purchase price for a property below the top band, so a second home bought for £300,000 in Wales now costs £3,000 more in Land Transaction Tax than it would have done before that date.

A report and figures being reviewed beside a laptop

The figures in one place

Set together, the rate changes since December 2024 cover both the cost of buying a second home and the cost of keeping it.

8%
Scotland's Additional Dwelling Supplement on a second property, up from 6% for contracts from 5 December 2024.
+1pp
the rise at every band of Wales's higher Land Transaction Tax rates, for transactions from 11 December 2024.
300%
the council tax premium Wales has allowed its councils to charge a second home since 2023.
no cap
the limit Scotland removed from its own council tax premium from 1 April 2026.

Revenue Scotland; Welsh Government; gov.scot, Local Government Finance Circular 6/2026

A worked example

This example uses a made-up purchase price. The tax rates and dates are the real ones set out above.

A £300,000 second home, bought today

Made-up price, real rates and thresholds

Scotland — Additional Dwelling Supplement at 8%£24,000
Wales — extra Land Transaction Tax since the rate rose£3,000
Annual council tax premium on top of that, every year it is ownedup to 300%

The two purchase-tax figures each describe a separate transaction, one buyer in Scotland and one in Wales. Do not add them together. The council tax premium is a different, recurring cost that sits on top of either one, every year the property is owned, and neither Scotland nor Wales has a fixed ceiling on how high a council can set it.

Accountancy work

Seeing the purchase tax paid on completion, the council tax charged each year, and the mortgage interest restriction on a buy-to-let return, because all three are already part of the figures the firm prepares.

Regulated advice

Setting out whether a second property remains the right way to hold that capital against the costs now sitting on it, alongside a pension, an ISA or another option, sits with the Equity & General financial planner.

The division between the two is set out in full in who does what.

Why this changes the conversation

A second home used to carry one extra tax charge, paid once, on completion. It now carries two: the purchase tax above, and a council tax premium that can run to three or four times the standard bill, charged again every year the property is kept. Edinburgh's suspension does not undo that shift. The council reverted to its own previous rate of 100% for six months, not to the ceiling that existed before 1 April 2026, and every other Scottish council is free to set its own rate above 100% in the meantime. A client who bought a second home assuming the costs were fixed at completion is working from an out-of-date picture.

The FCA's Financial Lives 2024 survey found that 8.6% of UK adults, and 13% of self-employed adults, had taken regulated financial advice in the previous twelve months. A second home can sit in a client’s finances for years without review while the purchase tax and council tax rules change. The figures behind the wider pattern are set out on the advice gap.

Two checks to run this week

  1. Look for a second LBTT or LTT return in a completion pack already on file. Where a client has bought an additional residential property in Scotland or Wales since December 2024, the supplement or the higher rate will show in the solicitor's figures.
  2. Compare this year's council tax bill for a second home against last year's. Any rise beyond the standard increase is the premium, and the rate is set by that council, published on its own website.

What is not yet settled

Edinburgh's review is due to run for six months from 10 April 2026, and the council has not said whether it will reinstate 300%, set a different rate, or add exemptions first. Other councils that have set a rate above 100%, including Highland, Glasgow, Scottish Borders and Midlothian, have not announced a review and could still revisit their own figure at a future budget, since the 2026 circular sets no floor and no ceiling either way.

Common questions

What is the Additional Dwelling Supplement in Scotland?

The Additional Dwelling Supplement is a flat charge added to the standard Land and Buildings Transaction Tax when a buyer in Scotland already owns a residential property anywhere in the world and is buying another one costing £40,000 or more. Revenue Scotland raised the rate to 8% of the full purchase price for contracts entered into on or after 5 December 2024, up from 6% before that date, as part of the Scottish Budget for 2025 to 2026. On a £300,000 second home, the supplement alone adds £24,000 on top of the standard rates. It applies regardless of whether the second property is a holiday home, a buy-to-let or a home bought for a family member.

How has the Land Transaction Tax higher rate changed in Wales?

The Welsh Government raised every band of the higher residential rates, charged on an additional property, by one percentage point for transactions with an effective date on or after 11 December 2024. The bands now run from 5% on the first £180,000 up to 17% above £1.5 million, and they apply in place of the main residential rates. Because every band moved by the same one point, the extra tax from the change works out at 1% of the purchase price for a property bought below the top band, so a £300,000 second home costs £3,000 more than it would have before 11 December 2024 (Welsh Government, Land Transaction Tax rates and bands).

Why did Edinburgh suspend its council tax premium on second homes?

Edinburgh Council set a 300% council tax premium on second homes and long-term empty properties as part of its 2026/27 budget in February 2026, taking advantage of the Scottish Government's removal of the old 100% cap. Eight days after the new rate took effect on 1 April 2026, the council suspended it and reverted second-home owners to the previous 100% premium while it reviews the policy, a pause reported to run for six months (The Scotsman, 10 April 2026). The underlying power has not changed: councils across Scotland can still set a premium above 100%, and Edinburgh can reinstate its own rate once the review ends.

Can an accountant advise a client on whether to keep a second home?

No. Setting out whether to sell, hold or change how a second property is owned, and weighing that against a pension, an ISA or another use of the same capital, is regulated financial advice and sits outside what an accountancy practice can do without FCA permissions. What the firm preparing the return can do is point to the figures already in the file: the purchase tax paid, the council tax charged, and how the rental or occupancy pattern is recorded. The firm can then ask whether the client has had a conversation with anyone about the property's place in their wider finances. The Equity & General financial planner sets out the options.

Where does this sit against the wider gap in who takes financial advice?

The FCA's Financial Lives 2024 survey found that 8.6% of UK adults, and 13% of self-employed adults, had taken regulated financial advice in the previous twelve months. A client who owns a second home in Scotland or Wales is, on those figures, unlikely to have had advice on what the property is costing them each year or what it is doing inside their estate. The council tax premium and the purchase tax are both fixed by law or by a council's own published rate, so the figures are not in dispute. Whether to keep the property given those costs is a question for the Equity & General financial planner.

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