Foreign companies own £4.4 billion worth of Scottish property, The Ferret can reveal, leading to calls for greater transparency to stop Scotland losing out on tax revenue.
Concerns have also been raised about the need for urgent action to stop criminals using opaque foreign companies to invest in Scottish property as a front for money laundering.
Registers of Scotland data obtained by The Ferret shows that on the last day of 2019, 3,237 Scottish properties were owned or leased by companies based outside of the UK.
The companies buying these properties paid a total of £4.42bn for them. They are likely to be worth even more than that today.
Further Ferret analysis shows that about 60 per cent of foreign owned property was bought by companies based in tax havens, allowing them to avoid paying tax. These 1,851 companies paid £2.76 billion for the properties.
The National Crime Agency stressed that as the UK property market is seen as a stable investment, Scottish property is sought after by legitimate investors. However it also warned that it could also be used to “launder the proceeds of crime”.
Campaigning organisation, Global Witness, said that previous investigations had shown how “the criminal and corrupt” stash dirty money in property, while hiding their identities behind anonymous companies. It called the figures revealed by The Ferret “deeply concerning” and said it highlighted the need for greater transparency.
Offshore-owned properties are located all over Scotland, from Shetland to Gretna and from Skye to Peterhead, according to the data.
According to the data, another postcode with a lot of these properties is PA3 3. This is due to a controversial car park investment scheme near Glasgow airport. Many of the parking spaces are leased to foreign companies.
The council areas with the most offshore property are Glasgow and Edinburgh, with 592 and 516 properties respectively, followed by Aberdeen (227), Renfrewshire (182) and South Lanarkshire (181). Renfrewshire’s properties include 53 from the airport car park scheme.
For years our investigations have exposed how criminals and the corrupt launder and stash dirty cash in property, while hiding their identities behind anonymous companies. Ava Lee, Global Witness
A spokesperson for the National Crime Agency told The Ferret: “UK property is a high value commodity, which is typically seen as a stable investment. As such, property is an asset which is sought not only by legitimate investors, but also by criminals and corrupt politically exposed persons to use as a vehicle to launder the proceeds of crime.”
The spokesperson continued: “This is often done through the establishment of complex corporate structures, including the use of so called ‘secrecy jurisdictions’ to further obfuscate the true ownership of the properties.”
Ava Lee, from anti-corruption campaign group Global Witness said: “For years our investigations have exposed how criminals and the corrupt launder and stash dirty cash in property, while hiding their identities behind anonymous companies. It is deeply concerning that no one – not even the government – knows the real owners behind £4.4 billion worth of Scottish property.”
Rachel Davies Teka, head of advocacy at Transparency International UK, said: “The UK’s property market is a prime destination for criminals and the corrupt to launder their stolen wealth. Owning property via an overseas company doesn’t automatically indicate wrongdoing, but when that company is incorporated in a secrecy jurisdiction like the British Virgin Islands it is extremely difficult to establish who really owns it.”
Teka added: “Using anonymous shell companies registered overseas is a common way in which corrupt individuals use their dirty money to purchase luxury property in the UK. This anonymity enables them to enjoy their ill-gotten gains with impunity, and sees much needed housing used as a personal safety-deposit box.”
This story is part of our ongoing investigation into land ownership in Scotland.
The Ferret consults with our members on a regular basis about the issues that we should look into. You can get involved and help fund our next investigation by joining The Ferret.