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Scotland’s finances

Taxing wealth not work

Scotland is a wealthy country, but it doesn’t feel that way for most people.

For decades, wealth has been allowed to accrue in the hands of a small number of people. Scotland has tried to forge a different path, by defending our public services and providing free access to many of life’s essentials. But our public finances are starting to show the strain. 

As a result of changes driven by Green MSPs over the last decade, Scotland has a more progressive tax system, where those who can afford it pay more, and those on lower incomes the least. That’s helped raise £1.8 billion more every year for public services like our NHS. 

But our focus must now shift onto taxing wealth rather than work, to build the most progressive tax system we can under devolution. 

With the powers of independence, Scotland could introduce a real Wealth Tax, and use Corporation Tax and other tools to tax big businesses effectively, raising billions of pounds for our 
public services. 

But we can still use the devolved tax system to shape the kind of country we want to be. That means supporting small, Scotland-based businesses and local high streets by shifting a greater share of the tax bill onto the likes of online retailer warehouses, out-of-town shopping centres and arms dealers.

We will introduce surcharges to those whose activities cause environmental, economic or social harms, and we will continue to ensure Scottish income tax remains fair and progressive. 

And we will transform the way we fund local services by finally scrapping the Council Tax and replacing it with a fairer, more effective system that fully reflects the wealth tied up in our housing market.

Replace the Council Tax 

• Scrap the unfair and broken Council Tax, replacing it with a Residential Property Tax (RPT) based on the value of the property. This will include an appropriate system of reliefs, including for households on low and precarious incomes as well as options to defer payment in cases of hardship. 
• The responsibility to ensure payment for rented properties will rest with the property owner and there will be a robust five year transition period as well as a redistribution system to avoid regional inequalities growing further.
• Undertake an immediate revaluation of property values and legislate for regular mandatory revaluations no more than five years apart as a first step towards replacement of the Council Tax. This will end the scandal of most people paying the wrong rate.
• Implement the mansion tax on properties valued at £1m and more, by implementing two new Council Tax bands.
• Introduce a surcharge for overseas owners of second and empty homes to crack down on property speculators based in offshore tax havens.

Income Tax

• Retain a progressive and redistributive Income Tax system.
• Set a higher rate for landlords’ income from rental properties. This will be introduced following the rollout of rent controls to avoid cost being passed onto tenants.
• Challenge the UK Government to accept that the power to tax income from shares and dividends is devolved. We will then set suitably high rates for this unearned income.

Land and Buildings Transaction Tax (LBTT)

• Reform the core rates and exemptions for LBTT to raise more income for our public services and drive positive changes in the housing system. 
• Create a new ‘mansion tax’ rate of 15% on properties worth over £1 million.
• Introduce a 100% relief for housing cooperatives buying properties.
• Introduce a surcharge on the purchase of large land-holdings (500ha +), forcing the breakup of more big estates at the point of sale.
• Close the loopholes which allow the monarchy, foreign militaries and property speculators to pay nothing in LBTT.
• Set a higher rate for businesses buying residential property, as is already the case in England, with an additional ‘super-surcharge’ rate for overseas companies trying to buy up housing in Scotland.
• Increase the Additional Dwelling Supplement (ADS) to 10%, raising tens of millions for public services and reducing the number of homes sold as second homes and investment properties.
• Set an overseas buyers rate, starting at 20%, to crack down on the global super-rich buying up Scottish properties as holiday homes during a housing crisis.
• Create a ‘Multiplying multiplier’ where the ADS rate paid increases for every additional property bought, discouraging a small number of landlords from buying up more and more properties.
• Set higher ADS rates for areas of acute housing pressure caused by holiday homes and short term lets, including in rent control areas, National Parks, and Areas of Linguistic Significance. 

Non-domestic rates

As a local tax, Non-domestic rates (NDR) should be set locally. In effect though, all key decisions over NDR are taken nationally. We would devolve rate-setting and surcharge powers to local councils, allowing them to design a system which suits their local economic, social and environmental needs. Short of that devolution however, we would deliver the following critical changes to the current system:

• Create a new band for £1 million+ properties such as the Barclays and JP Morgan facilities in Glasgow.
• End the exemptions enjoyed by big businesses, including those for salmon farms, ‘Enterprise Areas’ and the agricultural land exemption which allows certain industrial sites to masquerade as farms for tax purposes.
• Phase out NDR relief for biomass burners, to align with the position of the Committee on Climate Change.
• Disqualify companies from receiving tax reliefs if they are found to be in breach of minimum wage laws, or fined for environmental offences.
• Extend the day nursery relief to in-work settings, such as nurseries in colleges.
• Reform the Small Business Bonus Scheme (SBBS) to better support genuine small businesses while reducing the overall cost of the scheme. This would include changing the criteria from rateable value to other, more accurate, metric of business size.
• Disqualify socially harmful businesses from SBBS, such as Short Term Lets.

Taxing environmental and social harms

• Use the Non-domestic rates system to add surcharges to businesses which cause harm to our environment and communities, and raise funds to reinvest in public health measures and thriving local economies. These surcharges will include: 
  • Public health - This will ensure that supermarkets and other large retailers selling alcohol and tobacco make a greater contribution towards the NHS and other services which deal with the harm caused by their products.
  • Gambling - Casinos, bookies and other gambling venues which exploit some of the most vulnerable people in our communities will likewise be made to pay toward the cost of addiction prevention, recovery and support services. 
  • The ‘Amazon tax’ - A surcharge on the predominantly online businesses, e.g. distribution centres, which are forcing so many small businesses to close.
  • Out of town retail - A surcharge on out-of-town retail to support high street businesses.
  • Vacant and derelict land - End the scandal of absentee owners and landbankers blighting towns & cities and holding back economic development by simply making it too expensive for them to hold onto land and property they are not using.
• Explore further NDR surcharges on other businesses which do not have a positive social impact, including arms companies, licensed fireworks retailers, short term lets, fee paying private schools, and fossil fuel terminals, plants and pipelines. 

Air departure tax

• Overhaul the taxation of air travel in Scotland, by replacing the incoming Air Departure Tax with a frequent flyer levy. This will discourage high-income business travellers from taking so many polluting flights whilst avoiding families having to face a higher bill for their annual holiday.
• Ban private jets from using publicly owned airports. To discourage their use of commercial airports, work is already underway to introduce the private jet tax secured by Green MSPs earlier this year.
• Introduce a domestic flight surcharge, with the proceeds used to make long-distance rail travel cheaper.
• Support communities across the Highlands and Islands by exempting lifeline services to these communities from reforms such as the frequent flyer levy and domestic flights surcharge. 

Aggregates Tax and Landfill Tax

• Increase both the standard and higher rates of Landfill Tax as an incentive for businesses to reduce the waste they send to landfill. If revenues from these rises are sufficient, we will reopen the Scottish Landfill Communities Fund. 
• Implement the recommendations of the climate change review into Scottish Landfill Tax.
• Ensure that Aggregates and Landfill Taxes are well aligned, rapidly reducing construction waste and meeting Scotland’s circular economy objectives.

Introduce new taxes

• Develop proposals across the economy to introduce new taxes which raise funds for communities, including plans for a Carbon Emission Land Tax, Stadium Levy, Cruise Ship and a ‘point of entry’ levy for tourism, featured in other sections of this manifesto. 
• Introduce an infrastructure levy on large property developers to fund vital community infrastructure; we will do this by annulling the Planning Act’s sunset clause in May 2026.
• Introduce a Demolition Levy to compensate for loopholes in UK-set VAT rates, to encourage retrofit and renovation of buildings rather than environmentally harmful demolition, building on the proposals from the Chartered Institute of Building. Alongside this, we will continue to advocate for the reforms needed to VAT rates to prioritise renovation over demolition.
• Implement the Building Safety Levy to invest more in necessary cladding remediation work.
• Develop proposals for a Scottish Wealth Tax. 

Public Sector Reform

• Implement a worker-led reform programme for the public sector, which improves performance and makes savings, whilst rejecting the policy of austerity disguised as ‘efficiencies’ which has devastated public services since 2010
• Explore options for delivering savings through measures such as shared backroom services, but only if these do not undermine frontline services or compromise the hard-won policy of no compulsory redundancies