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TODAY'S OTHER NEWS

Boris Johnson stamp duty plans "disastrous" for one part of the country

A leading agent has suggested that some parts of the UK would face “a property exodus” if Boris Johnson’s proposals for stamp duty reform came into effect. 

David Alexander, joint managing director of property management firm Apropos by DJ Alexander Ltd, says Johnson’s proposal to scrap stamp duty for homes below £500,000, would prove “disastrous” for the Scottish property market. 

He says the proposal is aimed at injecting some life into the flagging London property sector but would open up an enormous disparity in taxation between different parts of the UK.

In Scotland home buyers already pay more in property taxes due to the devolved land and buildings transaction tax - the Scottish equivalent of stamp duty - which means that Scots pay £3,350 more than their UK counterparts for a £400,000 home and £8,350 more for a property costing £500,000. 

“The Johnson proposal would substantially exacerbate this difference” insists Alexander. 

“There is already a financial disparity between the Scottish and UK property markets with markedly higher levels of tax charged on homes north of the border valued at £330,000 upwards. If Boris Johnson’s proposal came into force it would mean that homebuyers in Scotland would be paying £4,600 in LBTT for a £300,000 home and £13,350 in tax for a £400,000 property while people in England paid nothing” he continues.

“This idea, in conjunction with Mr Johnson’s proposals for raising the higher rate personal tax threshold to £80,000 would disproportionately punish Scots income and their house buying costs. The tax threshold changes would result in Scots earning £80,000 paying £7,844.07 more in tax per year which in, itself might be a disincentive to move to Scotland.”

And he says landlords and property investors considering buying in Scotland would be even worse off than owner-occupiers.

“A £200,000 second property in Scotland would cost the purchaser £9,100 in tax compared to £6,000 in the rest of the UK if the Johnson proposal as implemented. At £400,000 the difference is £28,350 more in Scotland while those able to afford to buy a £1m second home would find themselves paying £118,350 (just under 12 per cent charge on second home ownership) in LBTT.”

He makes no bones about the effect all of this would have outside of London generally and in Scotland in particular. 

“If this proposal is introduced early in the expected Johnson prime ministership there would be an immediate end to property investment in Scotland. Why would anyone want to pay so much in taxes when in another part of the UK they would be charged so much less? Under these proposals, investors, second homeowners, and landlords would find everywhere but Scotland a much more attractive place to invest in and would take their money elsewhere.”

  • Kevin Davidson Hall

    Mr Alexander is right - this- this would be very damaging assuming the SNP Government do not make a similar move here - which them being them, they won't. "Squeezing the Rich" being of more importance, even when the reality is that as in England, less tax is collected when taxes go up !

    What will happen though is that the full extent of the loony left policies of the SNP and the damage they are doing to the Scottish economy will become clear to all, particularly when the effects are compounded by calls for another divisive Referendum.

    Scotland will never be the place to be or the place to invest it should be while these covert Marxists are in charge.

    There is already a massive black hole in their budget - which means still higher taxes and less services.

    Eventually the people will wake up, smell the coffee and will vote for someone more sensible and competent so that prosperity can be restored.


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    You Scots want to be independent so get your government to do the same.... can’t have it both ways!

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    We Scots voted to be part of the UK regardless of Brexit and did not vote for independence. SNP should respect that vote by the Scottish people.

    I agree with Kevin, calls for another Independence Referendum will be totally divisive for Scotland and will be disastrous for the Scottish Property market. Everyone can see the damage Brexit has caused the UK and you can only imagine the chaos if Scotland ever separates from the Uk

    Scotland could end up becoming a foreign country and it would be highly likely that a number of banks based in England would pull out the Scottish market, making borrowing for property in Scotland much more expensive.

    David Alexander's assessment of what will happen to the Scottish property market is 100% spot on and I hope the Scottish Government will take note.

    Property Investors in Scotland are already paying higher property taxes than England. The new Scottish PRS legislation, where there is no minimum lease period and where tenants can give landlords 28 days notice to leave, has already caused substantial numbers of Scottish Landlords to exit the market. The Scottish Government has now been left to fill this gap in the private rented sector.

  • Simon Shinerock

    True as this may be, it’s not generally a good idea to adopt a crazy policy and reject a sensible one simply because your neighbour is crazy

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    'Don't try and boost the market in your tax domain because it will make the tax regime in another tax domain look even worse'. Wow! What a convincing argument.

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