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A leading economist academic is warning that the charge which is replacing stamp duty in Scotland is a "very, very bad tax" which will hurt the entire market.

Professor Ben Jacobsen, chair in financial markets at the University of Edinburgh Business School, says the new Land and Buildings Transaction Tax - which comes into effect in April next year - is levied at "an awfully high percentage."

Although homes costing up to about £325,000 will attract the same or significantly less LBTT than they currently attract in stamp duty, homes above that will attract more - in many cases, much more as properties will face 10 and 12 per cent LBTT.

This is a very, very bad tax. Taxes like this make the housing market very shaky. People stay longer in lower-priced houses and it's harder to get onto or up the property ladder says Jacobsen.

Less mobility within the market means everyone, even first time buyers, will suffer he says. In addition, "innovators and wealth creators" would be deterred from moving to Scotland.

This does not bode well for years to come. I think it could hold back innovation he forecasts.

Comments

  • icon

    Well said!

    • 06 November 2014 11:37 AM
  • icon

    Seems to me that once again (as so very often) the politicians only have eyes for what they see as popular short term vote winning legislation of soak the so-called 'rich' with little thought of long term consequences.

    • 06 November 2014 10:15 AM
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