The Scottish Government's recent tweaks to its new Land and Buildings Transaction Tax - its replacement for stamp duty from April 1 - does little to help make the country's housing market more attractive, according to one agent.
John Coleman of Smiths Gore says that the proposed tax will discourage investors coming to Scotland and will damage an already ailing property market in Scotland.
"Although the new rates are £400 lower up to £325,000 than they are 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 per cent in LBTT, but now the SNP is proposing that those buying a property at anything over £750,001 must pay 12 per cent - even though people in England buying at £750,001 will only pay five per cent he says.
"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 insists Coleman.
He claims that the price differential increases as house values rise - so for example a £1m house in Scotland would cost nearly £35,000 more than the same house just over the border.
Coleman, who heads up the estate agency for Smiths Gore 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. 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 he claims.
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