SNP tax hammers £1m house sales ... ‘and the public purse’

THE market for homes worth more than £1million is being choked by the SNP’s stamp duty replacement, a leading estate agent has warned.

Buyers must pay nearly £35,000 more than in England and are at a ‘distinct disadvantage’ since Land and Buildings Transaction Tax (LBTT) was introduced in 2015.

Buying a house costing £1million south of the Border would mean a stamp duty bill of £43,750, but that rises to £78,350 under Scotland’s LBTT.

Experts warn that this could create a shortfall in Holyrood revenue, with fewer sales as purchasers are deterred from buying by the ‘punitive’ tax.

Faisal Choudhry, Savills head of residential research in Scotland, said: ‘Last year, the million-pound market seemed to be absorbing the punitive rates of LBTT better than other bands. However, the taxation malaise is spreading to this market.’

A slowdown had already been detected in the £500,000 to £1million range, with prospective buyers unable to pay the huge tax sum. Now Savills’ researchers have uncovered a decline in the £1million market with only 56 sales in the first half of this year, compared with 79 last year.

While Edinburgh remains the hub of the market, only 33 such sales were made in the first six months of 2017 compared to 45 last year. Aberdeen, hit by the oil slump, could previously be relied upon to generate the most £1million sales after Edinburgh. This year, there has been only one. Mr Choudhry said: ‘LBTT is putting buyers in Scotland at a distinct disadvantage and will do little to attract wealth from outside. The structure of LBTT relies heavily on the top end of the market, but buyers are being dissuaded.

‘The Scottish Government’s LBTT targets will not be achieved unless there is a significant change in rates.’

A Government spokesman said: ‘Official transactions and tax data show sales in the highest tax brackets are maintaining their share of overall property transactions and residential LBTT revenues in Scotland.

‘Revenue Scotland reports that 70 property sales above £750,000 in July brought in £4.7million tax revenue, resulting in the joint highest level of monthly take from this bracket since the introduction of LBTT.’

CLASS warriors will shrug off the news that the £1million home market is stagnating because of the SNP’s Land and Buildings Transaction Tax.

As with income tax rises, they assume only ‘the rich’ are affected. Not so.

If houses at the top of the market are not shifting, it creates a logjam and the tax revenue from high-end homes does not flow into Government coffers.

This leaves a black hole that means services must be cut – or that Finance Secretary Derek Mackay takes yet more cash from hard-working families.

The LBTT was bungled from the start and its deficiencies affect us all.

Isn’t it high time the SNP did something about it?