UK Budget 2026: what applies to Scottish real estate

By Elaine Kennedy-Walton

4 Nov 2026 2 min read

From data centres and infrastructure investment to business rates and support for small businesses, the Budget contains plenty for the property sector to digest. For Scottish real estate, the question is which measures actually apply north of the border. We pick out the announcements that matter most for Scottish owners, occupiers, investors and developers, as well as the areas where attention will now turn to the Scottish Budget on 3 December 2026.

Measure	Applies in Scotland	Why it matters
Data Centre Covenant	Yes	Sets five tests that all data centres are encouraged to meet and that strategic data centres must meet to get enhanced support, including faster grid connections.
Founders' Relief	Yes	A new 10% capital gains tax rate for qualifying founders could support investment in high-growth businesses.
Local Renewal Fund	Yes	Scotland will be eligible for the new £80 million fund, alongside Wales and Northern Ireland. Scottish allocations and individual projects have not yet been announced.
Central Belt investment	Yes	£24 million of new investment, including £6 million for a new outdoor events space at the Scottish Event Campus in Glasgow (subject to a business case) and £18 million for an Advanced Chip Design Academy led by the University of Edinburgh.
Defence Technical Excellence Colleges	Yes	£20 million of joint UK and Scottish Government funding for two colleges in Scotland, one in the east and one in the west.
English business rates package	No	Business rates are devolved and Scotland has its own system of rates and reliefs.
Higher Small Business Rate Relief thresholds for retail, hospitality and leisure	No	The increased English thresholds do not apply in Scotland where small businesses are supported through the Small Business Bonus Scheme. With relief in England now more generous in these sectors, the Scottish Government may be considering changes to the scheme's thresholds or relief levels.
Tax on property income	Not directly	Income tax rates on property income will rise by two percentage points to 24%, 44% and 49% from 6 April 2027 in England, Wales and Northern Ireland. The Scottish Parliament now has the power to set its own property income rates from 2027-28, so whether Scotland follows will be decided in the Scottish Budget.
Additional funding for the Scottish Government	Yes	The Budget provides an additional £600 million for the Scottish Government through the Barnett formula. How that funding is allocated could result in further spending relevant to Scottish businesses, infrastructure and development.

We will look at some of these changes in more depth soon. In the meantime, if you would like to discuss any of these points, please contact Dixcee Fast (Partner, Energy) or Robert Forman (Partner, Built Environment).