Couple withdraw Scottish house offer after warning of £9,000 tax on Kyiv flat

A Ukrainian woman and her Scottish partner have withdrawn an offer on a house in North Ayrshire after being told they could face a £9,000 property tax charge because she owns a flat in Kyiv, the BBC reports.

Kateryna Stepanovych fled Ukraine for Scotland in 2023, leaving the flat she bought in 2018. She and her partner, Mattias Lindgren, live in Orkney and had hoped to move this year. They withdrew their offer because they could not afford the potential extra cost.

“Why should we be punished with this tax for a property that’s in a war zone?” Lindgren told the BBC.

The charge is Scotland’s Additional Dwelling Supplement, paid on top of any Land and Buildings Transaction Tax due. According to Revenue Scotland, it usually applies when someone buying a residential property in Scotland already owns a home anywhere in the world and is not replacing their only or main residence. The standard rate is 8% of the purchase price for transactions from 5 December 2024, subject to transitional rules.

There are exceptions, including where an additional property is worth less than £40,000, and rules for people replacing a main residence. The general guidance does not determine whether the charge would apply to this couple.

Their Orkney MSP, Liam McArthur, raised the case in the Scottish Parliament on 3 November. First Minister John Swinney said the situation was not the purpose of the supplement and promised to ask Revenue Scotland to look at the details. He did not announce an exemption.

The BBC reported that Deputy First Minister Jenny Gilruth had previously told McArthur in a letter that the legislation did not allow the government or Revenue Scotland to waive the supplement at their discretion on a case-by-case basis.

For now, the couple are considering renting and postponing their plans to buy, the BBC reported.