Estate Agents warn Scottish Government of 'Two Tier property market'
For immediate release
Estate agents are urging the Scottish
Government to mirror the Chancellor’s extension of the current stamp duty holiday
south of the border to avoid creating a two-tier housing market in the UK.
Members of the Edinburgh Conveyancing
Group are writing to finance secretary Kate Forbes seeking the same treatment
for the Land and Buildings Transaction Tax (LBTT) whose threshold was raised
last year shortly after the start of the Covid pandemic.
Rishi Sunak
announced in his Budget speech on Wednesday that the current £500,000 nil rate
band for the Stamp Duty Land Tax (SDLT) for England and Northern Ireland, which
was set to end on March 31, will remain in place until June 30, giving buyers
three additional months to complete.
After this
date, ‘to smooth the transition back to normal’ the threshold will be reduced
to £250,000, until 30 September. The nil rate band will then return to its
previous level of £125,000 from October 1.
The Scottish
Government raised the LBTT nil rate threshold from £145,000 to £250,000 until
March 31, and ministers at Holyrood have so far failed to say whether there
will be any extension.
The tax
scheme currently imposes a charge of 2% on homes worth more than £250,000 up to
12% on those which sell for more than £750,000. Buyers of holiday homes,
buy-to-let properties and other second homes are charged an additional 4% under
the Additional Dwelling Supplement (ADS).
There are
fears that failing to apply the same extension, aimed at preventing a cliff
edge collapse of property sales, in Scotland could disadvantage the housing
market here.
Struan
Douglas, director of Edinburgh-based estate agency Purdie & Co, said: “There
is already a disparity in the rate at which property taxes apply north and
south of the border and failing to extend the holiday in Scotland will make the
playing field even more uneven.
“From March
31, there will be a situation where home buyers in Scotland start to pay tax on
properties worth £145,000 or more while their counterparts in England will pay
nothing on properties worth less than £500,000.
“The English
policy is dictated by the high value of homes in London and the South East but
there are areas elsewhere, in the north of England for example, where prices
are similar to those in Scotland and, in some cases, significantly lower.
“Ministers
in Edinburgh need to give proper consideration to how such a discrepancy will
impact on the market north of the border.”
The Scottish
Government introduced the LBTT as a copycat measure for the SDLT, introduced by
the Conservative Government at Westminster in 2015.
The LBTT had an inglorious start with ministers being forced to revise projected revenues to 2021 from £1.8bn to £962m, a drop of 46%.
Notes:
- Purdie & Co is an Edinburgh-based firm of solicitors and estate agents which combines the marketing and selling of residential properties with provision of legal services, including conveyancing and executry.
- Founded in 1998 the company, owned and managed by Solicitor-Directors Struan Douglas and Gosia Chylinska, service buyers and sellers at every stage in their property journey and advise developers on whose behalf they also buy and sell properties.
- Other work includes remortgages and other conveyancing work, wills and executries, powers of attorney and notary public services.
- For more information visit www.purdiesolicitors.co.uk
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