Tycoon calls off home deal over £162k SNP tax

HIGH rates of tax on property introduced by the SNP are putting investors off buying in Scotland, according to a US entrepreneur.

Terry Winters said he cancelled plans to buy a £1.7million house overlooking the Old Course in St Andrews after learning he would face a £162,000 tax bill.

The 74-year-old golf fan said the fees were a ‘deal-breaker’ and effectively put up a ‘no entry sign at the Border’.

He added that the Land and Buildings Transaction Tax (LBTT) introduced by the Scottish Government is deterring other foreign investors.

When SNP ministers took control of stamp duty, they increased charges on middlesized and larger properties.

The move has been blamed for a big drop in demand at the top of the market.

Mr Winters, from Scottsdale, Arizona, said he ‘recoiled in horror’ when he learned about the tax he would have to pay on the townhouse. His bill would have been £50,000 higher than if he had bought a property at the same price south of the Border.

He added: ‘If this tax is meant to discourage foreign investors and depress property prices, it’s doing its job. The prospect of being landed with such a huge tax bill was a deal-breaker, and it will be for many others.

‘It made me feel my investment wasn’t wanted. I’ve worked hard to build my wealth and I’m certainly not going to give money away.’

Under LBTT, the tax rate jumps from 2 per cent to 5 per cent for homes costing £250,000£325,000, then 10 per cent from £325,000 and 12 per cent on homes above £750,000.

Scottish Conservative finance spokesman Murdo Fraser said: ‘The SNP was warned about the unintended consequences this policy change would have. We said these could damage the economy and deter entrepreneurs and wealth creators from coming to Scotland.

‘That’s coming to pass and the SNP has to explain what it is going to do to stop this happening in future.’

A buyer of a £1million home will pay £78,000 in LBTT, compared with £43,750 in stamp duty south of the Border.

Jamie Macnab, of estate agent Savills, warned that houses in the £800,000-£1million band are a particular ‘pinch point’ amid evidence of sluggish sales.

Last week, another US investor pulled out of an £850,000 deal to buy Drumkilbo House in Perthshire after learning that his tax bill would be £60,350 – almost twice the £32,500 that would be levied in stamp duty down south.

Mr Macnab said: ‘Everything had been agreed, then the buyer was told how much LBTT was going to be. He was in shock.’

A Scottish Government spokesman said: ‘Our priority for LBTT remains helping first-time buyers to enter the property market and assisting people as they progress through the market.

‘Registers of Scotland’s and Revenue Scotland’s data shows sales above £325,000 are not performing any differently relative to the rest of the market.

‘Only last week, Savills’ own report on the Scottish property market highlighted that sales above £1million were outperforming the market prior to the introduction of LBTT.’

‘Deter wealth creators’