Help for first-time buyers but calls to overhaul property tax ignored

THE SNP ignored calls to overhaul the controversial Land and Buildings Transaction Tax (LBTT) despite fears it is causing the housing market to stagnate.

Derek Mackay announced that he will lift the threshold at which first-time buyers pay LBTT – a move which is expected to cost the Scottish Government £5million.

LBTT, introduced by the SNP to help firsttime buyers, has led to a fall in the sale of homes of more than £325,000.

Property industry chiefs had urged Mr Mackay to raise the threshold at which the levy rises to 10 per cent. Currently, this is applied at £325,000 and it had been argued this should be increased to £500,000.

Scottish Conservative housing spokesman Graham Simpson said: ‘The move to follow the UK Government’s lead in providing more help for first time buyers is welcome in itself. But Derek Mackay failed to address the key problem with LBTT in his Budget.

‘The industry itself has repeatedly said the rates are too high further up the market which is causing it to stagnate. That jams up the system for everyone else.

‘There’s no use lending a hand to firsttime buyers if the properties aren’t there for them to bid for.’

The Finance Secretary said he was taking steps to ‘make home ownership a reality for more of our young people’ by raising the threshold for which first-time buyers pay LBTT to £175,000. But LBTT will still apply on properties costing £145,000 or more if it is not the buyer’s first home.

Alan Cumming, national estate agency director of Aberdein Considine, said: ‘The cabinet secretary has gone some way to closing the gap between first time buyers in England and Scotland, but some will feel he hasn’t taken the necessary steps to address the difficulties of those struggling to buy their first home in more expensive parts of the country.

‘It is disappointing that he has chosen not to examine the middle and upper bands of LBTT, which have caused fundamental market interference in Scotland, particularly in the £500,000-plus price bracket where significant sums become due.’