Buying a property in north Northumberland could soon be a much better tax proposition than just over the border in Berwickshire.
John Coleman of Smiths Gore is urging the SNP to rethink their proposed Land and Buildings Transaction Tax (LBTT), which will make England a more attractive place to buy property than Scotland.
With the new Stamp Duty Land Tax (SDLT) being introduced for the rest of the UK, this has highlighted the huge differences between the two amounts, making the Scottish tax up to double that of the English system.
He says: “As of 1st April 2015 a £500,000 farmhouse in north Northumberland will cost a buyer £15,000 in SDLT, whereas the exact same house a few miles away in Berwickshire will cost a buyer £27,300 in Scottish tax.
“So the buyer would have to pay an extra £12,300 just for the privilege of living in Scotland. I can’t see that being a tempting selling point for investing in Scotland. The Scottish government needs to make Scotland more attractive to inward investors, not less so.”
Coleman, who is head of farms and estate agency for Smiths Gore, also says that the proposed LBTT, which is due to start in April, may speed up a few transaction in the months leading up to the changes.
“Buyers will understandably want to avoid paying twice as much tax for a property, so I anticipate a flurry of activity between now and April - even though this is normally the quietest period for property sales.”
Coleman also says that there is a great deal of confusion about the taxes so Smiths Gore has produced an online calculator to help people work out what they will have to pay.”