An estate agent has predicted that the proposed Scottish property tax (LBTT) will discourage investors going to Scotland.
John Coleman of Smiths Gore said: “Although the new rates are £400 lower up to £325,000 than they will be south of the border, the rate increases above that are punitive.
“It was bad enough that buyers purchasing property at £1m should be expected to pay 12% in LBTT, but now the SNP/Swinney is proposing that those buying a property at anything over £750,001 must pay 12% - even though people in England buying at £750,001 will only pay 5%.
“This is more than double the English tax and would mean for example that a house in Berwickshire worth say £760,000 would cost the buyer an extra £49,549 in tax, whereas a few miles away in Northumberland, the same house would cost £27,700 in tax - making it £21,849 more expensive to live in Scotland.
“And the price differential increases as the house values do - eg a £1m house in Scotland would cost nearly £35,000 more than the same house just over the border. Surely that is not going to attract investors to Scotland! To make Scotland a thriving prosperous country, it needs inward investment, and this is putting out the wrong message to everyone.”
Coleman, who heads up the estate agency in Scotland, also questions whether the taxes will allow people to move up the housing ladder.
“As people’s families expand, so do their housing needs,” he said. “Also, nowadays more and more young people, unable to get jobs, are moving back into the household, and old people, who are living longer, are also moving in with family, putting pressure on space. But this tax is prohibitive to moving up the property ladder. It will be only the mega rich who will be able to purchase big homes. And it is unlikely that lenders and mortgage providers will lend the tax, so that burden will be borne by the purchasers.”