Opportunity
The Scottish Government’s budget 2025-26 and tax strategy included a commitment to working with the Scottish Land Commission (SLC) to explore tax and fiscal changes that could be made to further support land reform and reduce greenhouse gas emissions from land, including considering options for a carbon land tax. This takes into consideration previous public
calls for a carbon emissions land tax as proposed by the John Muir Trust.
The SLC believes that tax is a potentially significant lever in delivering the government’s land policy objectives, for example it could raise revenue, incentivise behaviours and help stabilise land prices. With over 50% of the UK’s wealth being tied up in land and property, it is our most valuable asset1. However it only forms a small part of the total tax base. We believe there is
a case to strengthen the link between land and taxation.
At present, land is taxed indirectly through income and capital, to which specific reliefs and exemptions are applied. The current mix of reserved and devolved tax powers means that the Scottish Government is limited in its ability to use tax in support of land policy. In 2022, we advised Scottish Ministers on how it could support land reform priorities including diversification of land ownership, town centre regeneration, making a just transition to net zero, and supporting active farming.2
2 Scottish Land Commission (2022) Land Reform and Taxation: Advice to Ministers. Available at: https://www.landcommission.gov.scot/downloads/61efa506191e2_Land%20Reform%20and%20Taxation%20-%20Advice%20to%20Scottish%20Ministers.pdf
