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Homebuyers handed tax break but Forbes in UK funding row
KATE Forbes has handed a tax break to homebuyers – but has been accused of “inventing grievances” after claiming Scotland will only receive a small fraction of a £30 billion funding package from Westminster.
Scotland’s Finance Secretary announced that the threshold for homes subject to the land and building transition tax (LBTT) will be raised from £145,000 to £250,000, while £80 million of extra funding will be made available to help first time buyers build up deposits.
But the changes will not happen immediately due to legislation required to be in place – leading to concerns that buyers will hold off from purchasing homes until the perk is rolled out.
Ms Forbes added: “The rates for the additional dwelling supplement and non-residential LBTT will remain unchanged.
“That means that eight out of 10 people purchasing property in Scotland will be taken out of LBTT and all those purchasing homes above £250,000 will be £2,100 better off.”
The move has been welcomed by businesses, but leaders have warned that urgency is needed in introducing the changes.
Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “This will not only boost the housing market it will also support the construction industry, both of which are essential to addressing Scotland’s chronic housing shortage.
“We ask that this should be urgently fast tracked to prevent distortion in the marketplace.”
The Finance Secretary has disputed claims by the UK Government that Scotland will receive £800 million of funding from the Chancellor’s package of support announced on Wednesday – accusing Westminster of “bypassing devolution”.
Ms Forbes tweeted that of the funding, “the Scottish Government will receive only £21 million”.
Leading economist David Phillips, associate director of the Institute for Fiscal Studies (IFS) told the Herald that the Finance Secretary’s figures did not add up, but a lack of transparency from Westminster makes it difficult to determine the true amount of new money the Scottish Government will receive.
When asked about Ms Forbes’s claim, Mr Phillips said: “That is not true.”
He added: “The £21m must be from a very narrow definition of things that were announced yesterday that hadn’t
Those purchasing homes above £250,000 will be £2,100 better off
been announced or trailed before the speech, as I can’t see where that figure has come from.”
Mr Phillips said the confusion and rows have not been helped by Westminster’s failure to publish funding reports, which previously showed how much devolved administrations were receiving.
Scottish Conservative housing spokesperson Graham Simpson called on Ms Forbes to “spend less time inventing grievances” and focus on bringing in the LBTT changes as soon as possible.
A Scottish Government spokesman said: “The 0.1% [£21m] figure quoted by the Cabinet Secretary correctly states what proportion of the UK Government’s £30 billion of additional spending to support economic recovery will be coming to Scotland in Barnett consequentials.
“The figure quoted comes directly from the Treasury’s own calculations – and has been confirmed by the analysis of both the Fraser of Allander Institute and the Scottish Parliament Information Centre.”