Tories: Let councils set housing tax

COUNCILS should be given the power to set housing tax rates so they can respond to local property prices, according to the Scottish Conservatives.

The party wants to hand individual local authorities control over the land and buildings transaction tax (LBTT), which is paid when a property is purchased.

It would allow authorities to lower LBTT rates if a boom in prices leaves people struggling to get on the housing ladder.

Scottish Tory leader Douglas Ross will unveil the proposal as part of a package of housing measures as he launches his party’s local election campaign today in Midlothian. He will also call for the current threshold for paying LBTT to increase from £145,000 at present to £250,000, and set a target of building 25,000 new homes a year.

Mr Ross said: ‘For too many people, property ownership has become an unattainable dream. Skyrocketing house prices are making it unaffordable, even for families with good incomes. The best way to address house prices is to build more homes.

‘We are setting out proposals to increase housebuilding across Scotland that would make homes more affordable and provide a huge boost to local economies.’

Although different LBTT rates could help first-time buyers get on the property ladder, it could also lead to investors snapping up homes in areas with lower rates.

Nicola Barclay, chief executive of Homes for Scotland, said: ‘With a shortfall of close to 100,000 homes built since the last recession, building more is the only way to solve Scotland’s housing crisis. Delivering more homes on the ground requires real political commitment at a local level.’

A Scottish Government spokesman said: ‘The Scottish Government has taken a progressive approach to the setting of LBTT, prioritising support for first-time buyers and helping home movers as they move through the market.

‘Our LBTT relief for first-time buyers means no tax is payable on properties worth up to £175,000.’