Next steps for land reform

4. Delivery – co-ordinated use of policy, tax and fiscal levers

While some measures will need legislation, a land reform programme can and should be delivered through a wide range of policy, tax, fiscal and legislative levers. Land reform need not wait for one big land reform bill every decade, it can be progressed by a range of co-ordinated measures. Alongside the active use of public land ownership, tax and fiscal policy has a particular role to play.

4.1 Tax and fiscal policy

Almost two-thirds of UK wealth is held in land and property assets. The opportunity is to tax land better and in more consistent ways, providing greater predictability and certainty for taxpayers and government, and more effective options to achieve the behavioural changes tax can influence. 

Scotland can use its tax and fiscal powers in new and improved ways to create new land opportunities, support economic productivity and deliver on land policies. Investing in a modern system to underpin land and property taxation would be a major opportunity for national and local government.

Through ScotLand Futures we heard:

• People recognise the current tax system is limited in its ability to support productive land use.
• There is strong appetite for improving how we use tax to help ensure the benefits of land ownership and natural resource value are shared fairly and productively.
• There is interest in new ways of taxing land, including land value taxation.

Wider evidence and experience shows:

• There is not currently sufficient data on land use, value and ownership for Scotland to make full use of existing or new powers in a potentially transformative way.
• The relationship between tax and other Scottish Government funds, grants and fiscal mechanisms needs to be better aligned.
• Scotland falls behind other countries in the way we gather land data to inform tax and fiscal decisions.¹⁸

Key steps to develop:

• A phased delivery plan for the taxation of land that builds tax and data infrastructure fit for the future.
• Establishing a practical way to bring all land onto the valuation roll or equivalent database, opening up future options to reform annual taxation of land.

• Reforming conditionality, public grants and spend to ensure that these are more effectively aligned and more consistent in the signals they give to landowners and managers.

   

¹⁸ Beebee, M., Chitrao, A., Gregory, R., and McPherson, E. (2025) Approaches to land valuation in the tax system. Scottish Land Commission