Scottish Budget 2026-27: Key Points
Finance Secretary Shona Robison delivered the Scottish Budget today, with total spending of almost £68 billion. There are a number of changes we would like to make you aware of.
Income Tax
The structure and rates remain unchanged. The Starter rate and Basic rate thresholds have been increased by 7.4%, allowing more income to be taxed at these lower rates. The Intermediate, Higher, Advanced and Top rate thresholds remain frozen.
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Scottish Income Tax thresholds for 2026-27 |
Mansion Tax
Two new council tax bands will be introduced from April 2028 for properties valued over £1 million. A £5m budget has been allocated to carry out targeted revaluations of properties currently in bands G and H, effectively splitting these into four bands.
Revenue from the new bands will go directly to local councils. Edinburgh is likely to benefit most – over half of the 391 properties sold for more than £1m in 2024-25 were in the capital.
There are no plans for a broader revaluation, so the rest of the council tax system remains based on 1991 property values. A nationwide revaluation would see roughly half of Scottish homes change band – a political headache successive governments have avoided.
Council Tax
There will be no cap on council tax increases this year. The Scottish Government hopes the funding settlement will lead to “reasonable” rises, but the decision rests with each of Scotland’s 32 councils.
Last year saw no cap either, with some authorities – including Clackmannanshire – opting for double-digit increases.
Councils will set their rates over the coming weeks, with decisions likely influenced by May’s Scottish election.
Private Jet Tax
A Scottish tax on private jets will be established, with details to be confirmed.
Rental Income
Unlike the UK Government’s 2% increase to property income tax rates from April 2027, Scotland has not followed suit. Rental income continues to be taxed at standard Scottish Income Tax rates. However, this could change with future budgets in subsequent tax years.
What’s Not Changing
- Personal Allowance remains frozen at £12,570 (set by Westminster)
- LBTT residential rates and bands maintained at current levels
- First-time buyer relief continues
- Inheritance Tax remains reserved
If you’d like to discuss how any of these changes might affect your financial plans, please get in touch.