Overseas wealthy landowners should pay more tax in Scotland
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Executive summary
A targeted increase in taxes on overseas wealthy landowners in Scotland would address clear gaps in the current system—chiefly revenue leakage, concentrated ownership, and lack of local control—but faces political, legal and administrative constraints that make sweeping national land taxes unlikely in the short term. Advocates point to devolved powers for local taxation and recent Land Reform legislation as channels for change, while opponents warn of investor flight, legal complexity and the limits of devolved competence and local government capacity [1] [2] [3] [4].
1. The problem: revenue leaves Scotland while ownership concentrates
Campaigners and researchers describe Scotland’s land as a concentrated store of wealth whose economic benefits often flow to foreign owners and offshore structures rather than local services, citing large holdings by overseas billionaires and families as emblematic of the pattern [1] [3]. The argument that foreign landowners pay tax to their home jurisdictions rather than to Scotland is highlighted as a feature that enables “outflow of revenue” and weakens local fiscal benefit from land values [1].
2. What powers exist and what’s been done recently
The Scottish Government has used devolved taxes such as the Land and Buildings Transaction Tax (LBTT) and an Additional Dwelling Supplement to shape behaviour on second homes, and it has launched reviews and consultations on LBTT and related reliefs in 2025, signalling a willingness to tinker with existing instruments rather than create a new national land tax [5] [6] [7] [8]. The 2025 Land Reform (Scotland) Bill added scrutiny and reporting for large estates and landed management plans, but its advocates warn the Bill alone will not disrupt concentrated ownership without tax measures [9] [3].
3. The reform case: land taxes as leverage for redistribution and stewardship
Experts and the Scottish Land Commission argue that increasing the role of land values in taxation could support diversification of land ownership, regeneration, farm viability and a just transition to net zero, and that progressive use of reliefs could steer land use toward public priorities—an argument that frames taxation as a policy lever to change patterns of ownership and use [2]. Proponents assert devolved routes exist to allow local authorities to operate land value taxes or similar instruments so long as revenues fund local services, giving a practicable avenue for targeting overseas owners at sub-national level [1] [2].
4. The counter-arguments: capacity, political risk and legal limits
Sceptics point to deep structural constraints: Scotland’s devolved settlement limits certain national tax options, local government in Scotland is argued to lack the capacity and democratic engagement required for effective local wealth taxation, and past failures to reform council tax demonstrate political and administrative inertia [4]. Farming bodies and large landowners have mobilised to resist rapid changes to inheritance and tax rules, warning of negative impacts on borrowing, investment and rural confidence [10] [9].
5. Fiscal trade-offs and likely impact
Government modelling shows devolved tax changes can raise material revenue—illustrative changes to income tax produce hundreds of millions—but interactions and behavioural responses make precise estimates complex; nonetheless modest changes at scale could generate meaningful sums for public services if designed and phased carefully [11]. The Scottish Land Commission recommends steady, well-explained reform to increase the share of taxes based on land values rather than abrupt shifts that risk legal challenge or capital flight [2].
6. Politics and hidden agendas
Policy proposals are filtered through competing agendas: reformers emphasise redistribution and community control, industry and rural interests emphasise stability and property rights, and some political actors use the issue to score on nationalism or anti-elite rhetoric; these dynamics help explain why the Land Reform Bill avoids a national land tax while signalling other measures and consultations [3] [1] [12]. Observers also note that the Scottish Government’s incremental approach may reflect both legal limits and electoral caution rather than lack of intent [5] [4].
Conclusion: a conditional yes, delivered incrementally
Given the evidence, a policy stance that overseas wealthy landowners should pay more tax in Scotland is defensible on fiscal and justice grounds, but it must be pursued through staged, legally sound measures—localised land value taxation, strengthened LBTT/ADS tools, targeted relief reform and sustained public engagement—because constitutional limits, administrative capacity and political resistance make a rapid national land tax impractical today [1] [5] [2] [4].