Plans to introduce a mansion tax in Scotland could raise £16m, the Scottish Government has announced. The move will see new council tax bands created for properties valued at £1 million and £2 million, targeting the most expensive homes in the country.
New Tax Bands and Revenue Estimates
Under the current system, councils set the rate for band D, with other bands determined by a formula set by ministers. The new bands will be added without altering the existing structure. An indicative scenario suggests that owners of £1 million properties could pay an additional £720 per year, while those with homes worth more than £2 million would be charged an extra £3,600 annually.
Total revenue generated is estimated to be between £12 million and £16 million, averaging £500,000 per local authority. This additional income would be retained and distributed by councils. For context, the Scottish Government expects to raise £3.5 billion in council tax this year, meaning the highest estimate would increase cashflow by just 0.45%.
Government Justification and Consultation
Deputy First Minister Jenny Gilruth defended the policy, stating it is “based on fairness.” She highlighted that “some multi-million pound properties have council tax bills that are not materially different from those faced by people living in far more modest homes.” Gilruth also emphasised that the additional revenue “will be retained in full by local government to support the local services communities rely on – unlike the UK Government’s proposals for a similar scheme that are set to be returned to the Treasury.”
The consultation, launched on July 6, 2026, will remain open until August 24. Gilruth noted that the progressive tax approach helps target investment in economic growth, deliver public services, and support cost-of-living measures not available elsewhere in the UK, such as free tuition, free prescriptions, and a £2 bus fare cap across Scotland.
Political Reactions
The Scottish Greens welcomed the consultation as a “significant step” but called for further action. Party MSP Lorna Slater said, “There’s much further to go if we are to give our services the funding they deserve. We need to go further to empower councils, reduce inequality and build a tax system that reflects people’s ability to pay.”
However, Scottish Tory finance spokesman Craig Hoy criticised the plans as “performative.” He argued, “In targeting a small minority of properties, the revenues these new bands would bring in won’t touch the sides, and that’s before the administrative costs are factored in. But there is a real danger that these punitive rates put people off buying in Scotland, which could damage the entire housing market.” Hoy also warned that the tax could affect “asset-rich, cash-poor individuals.”
