Scotland's alternative to stamp duty, the new Land and Buildings Transaction Tax, takes effect from Wednesday - with uncertainty as to what impact it will have on the market north of the border.
Anyone buying a house above £325,000 will pay more in LBTT. The most affected are going to be particularly those purchasing family homes' in some of the hot spot' housing markets in Scotland. The people purchasing in this category are not necessarily super-rich and the measure has the potential to adversely impact on recovery of the housing market in these areas according to a spokesman for the Council for Mortgage Lenders.
However Mark Hayward, managing director of the National Association of Estate Agents, says the changes have been heavily sign-posted by the Scottish Government. No doubt LBTT will have some short term limited impact until the market factors-in the changes and adjusts accordingly he says.
Eric Curran, managing partner of DM Hall Chartered Surveyors in Glasgow, is also doubtful that there will be a drastic impact. At the upper end, prices offered will reflect the new tax environment and in the middle and lower ends of the market the new regime will soon be accepted as the norm he says.
Here are the new and old duty figures:
- LBTT:
Up to £145,000 - 0%
£145,001 to £250,000 - 2%
£250,001 to £325,000 - 5%
£325,001 to £750,000 - 10%
£750,001 and over - 12%
- Old Stamp Duty:
Up to £125,000 - 0%
£125,001 to £250,000 - 2%
£250,001 to £925,000 - 5%
£925,001 to £1.5m - 10%
Above £1.5m - 12%
Comments
The tipping point will, more accurately, be 333,000, above which more tax will be payable under the new regime than at present.
If it has the same effect that the reforms in England have had, people in Scotland will be laughing.