Scotland Faces Double-Digit Tax Hikes

Households in Scotland are facing significant council tax increases, with proposed rises significantly outpacing the current inflation rate. Several councils are considering double-digit hikes to address funding shortfalls. Aberdeenshire and Moray councils have proposed the largest increases publicly so far, with a 10% rise, more than three times the inflation rate of 3% in January.

Other areas are also seeing substantial proposed increases, including Comhairle nan Eilean Siar at 9.5%, Midlothian at 9%, and Shetland at 7.3%. Scottish Borders Council has already approved an 8.5% rise. In parallel, Scottish Water has announced that water and sewer rates will increase by 8.67% starting April.

These potential hikes come after a period where council tax rates were largely frozen or capped for many years, a policy that ended in April 2025. The Scottish government has not imposed a freeze this year, granting councils full discretion over tax rates. However, ministers have expressed a desire to avoid large increases.

Local authorities, responsible for essential services like education and social care, rely on government funding and council tax revenue. While council tax constitutes a smaller portion of their budgets, it offers the most control. Edinburgh is also set to introduce a 5% tourist tax on overnight stays from July 24, 2026, aiming to raise approximately £50m annually.