First-time buyers’ tax break... ‘but just 12 sales a month’

PLANS to help people get on the property ladder by exempting them from tax have been unveiled by ministers – but their advisers say the move will only generate 12 sales a month.

The Scottish Government yesterday launched a consultation on proposals to free first-time buyers from paying tax on purchases of up to £175,000 from June.

At present, buyers pay a two per cent land and buildings transaction tax (LBTT) rate on purchases between £145,000 and £250,000.

The planned change will save first-time buyers up to £600 and is expected to benefit up to 12,000 people, with around 80 per cent paying no tax.

But the Scottish Fiscal Commission, the Scottish Government’s own economic forecaster, has predicted that the move will only lead to an extra 150-200 property sales a year.

It even states these will merely ‘displace other transac- tions’ which would happen anyway, involving home movers or buy-to-let landlords.

Murdo Fraser, finance spokesman for the Scottish Conservatives, said: ‘Once again, closer analysis of the SNP’s Budget has revealed more eye-catching gimmicks that will either have a very damaging effect, or very little effect, on our economy.

‘Scottish Conservatives have long argued for a review of LBTT as it is causing a stagnation in our housing market that affects all buyers.

‘The SNP must review LBTT to find effective, long-term solutions to help our housing market, not just the quick headline.’

Finance Secretary Derek Mackay said: ‘We are committed to helping as many people as possible to buy their first home.

‘Since its introduction, LBTT has prioritised support for first-time buyers and assisted people as they progress through the property market.’

‘Eye-catching gimmicks’