According to 2015 results published in Strutt & Parker’s Scottish Estates Market Review (Spring 2016), Scottish estate sales were up 171% on the previous year. Consequently, this is a market in which we have been increasingly active.

Scotland of course has its own distinct legal system and, for those used to buying in England and Wales, the contract and conveyancing processes can feel very different. As an independent UK law firm, based in England, we find ourselves well-placed to “demystify” the Scottish property system for those unfamiliar with Scottish practice.

There are also a number of live issues affecting Scotland on which we are able to provide specific advice and guidance.

Land Reform

Land reform has been high on the Scottish political agenda for some time now; Scotland’s First Minister, Nicola Sturgeon, having previously declared it “unfinished business”. Designed to increase the transparency and diversity of land ownership in Scotland and support community acquisition of land, the Land Reform (Scotland) Act 2015 was passed by the Scottish Parliament in March this year and is the next step in the Scottish Government’s land reform programme. This important piece of legislation contains a number of controversial provisions including a community right to buy land in order to further sustainable development which will apply to all land in Scotland. Substantive provisions of the Act are not yet in force and a lot of the detail has been left to secondary legislation. We will be following implementation of the Act very closely.

Private Housing Tenancy Reform

Another piece of legislation causing waves is the Private Housing (Tenancies) (Scotland) Act 2016. Existing forms of tenancy for residential properties in Scotland are to be replaced by a new form of tenancy to be known as a ‘Private Rented Tenancy’. Controversially, landlords will be unable to recover possession of a let property simply on the basis that a tenancy agreement has reached its end date. The Act will have a significant impact on Scottish estate properties which include rental portfolios. This Act is not expected to come into force until late 2017 at the earliest.

Land and Buildings Transaction Tax

Many will be aware that Scotland introduced its own stamp duty land tax system known as Land and Buildings Transaction Tax (“LBTT”) back in 2015. Whilst a “slice” system of tax now operates north and south of the border in respect of both residential and non-residential properties, it is important to be aware that different rates and rules apply. Whilst non-residential rates generally work out cheaper in Scotland for purchases above £300,000, rules in relation to second home surcharges which came into effect on 1 April 2016 operate very differently, particularly in relation to mixed use properties such as landed estates, and can be more financially onerous in Scotland.

With thanks to Robert McCulloch, Partner of Strutt & Parker, for kind permission for quoting results published in their Scottish Estates Market Review, Spring 2016.