The Scottish Budget: What has Edinburgh got in store?

Scotland’s Finance Secretary, Shona Robison, has delivered the country’s final budget before fresh Holyrood elections in May. The Scottish National Party (SNP) will have been mindful that this was its last chance to demonstrate fiscal competence before people go to the polls in a few months’ time. The Budget contained plenty for wealthy Scots to chew over with the introduction of a so-called ‘Mansion Tax’ in Scotland, along with key changes in the income tax system, a private jet tax and some welcome relief on business rates.

Here's what caught our eye in the Scottish Budget:

Mansion Tax

The controversial ‘Mansion Tax’ has belatedly made its way north of the border to Scotland with the Scottish Government announcing two new council tax bands for properties valued over £1 million, effective from 1st April 2028. This measure aims to increase contributions from owners of the most expensive homes. Scotland currently uses eight council tax bands from A-H, but two new bands ‘I’ (£1 million – £2 million) and ‘J’ (Over £2 million) will be introduced.

Thresholds and Bands

The adjusting and freezing of income tax bands was a big theme in this year’s Budget. Scottish taxpayers are subject to six tax bands rather than the three that exist elsewhere in the United Kingdom. The Government announced that the basic and intermediate rate tax thresholds will rise by 7.4% in April 2026, providing some welcome relief for lower earners. But the bigger headline for wealthier individuals is the Government’s plans to extend the freeze on thresholds for higher, advanced and top rate taxpayers up to 2028-29. Frozen thresholds are known to encourage a concept known as ‘fiscal drag’ whereby inflation pushes some taxpayers into higher bands where they pay more into government coffers.

The tax levels planned for 2026/27 are as follows:

Business Rates Relief

The Budget includes Non-Domestic Rates relief to help businesses. A 15% relief is available for retail, hospitality, and leisure properties, liable for the intermediate or basic property rates, with a rateable value up to £100,000, capped at £110,000 per business. This relief will be available from 2026 through to 2029, providing much-needed assistance to key industries suffering under the strain of current economic conditions. The small business bonus scheme will also be extended by three years. This gives relief to 100,000 small businesses from paying rates.

Come Fly with Me

The Scottish Government intends to add a Private Jet Supplement to its new Air Departure Tax (ADT) system, which replaces the UK's Air Passenger Duty from 1st April 2027. This supplement for private jets, planned for 2028-29, aims to make higher earners contribute more to environmental goals. 

How does the Scottish budget work?

The Scottish budget is an annual cycle of financial planning and parliamentary scrutiny that legally authorises government spending for each fiscal year, which runs from 1st April to 31st March. The budget is funded by the UK block grant, calculated via the Barnett formula, alongside devolved tax revenues like Scottish Income Tax and limited borrowing powers. Once presented, a Budget Bill is introduced and must pass through a three-stage process in the Scottish Parliament. During these stages, Members of the Scottish Parliament and specialised committees scrutinise the plans, debate general principles, and vote on potential amendments.