Scotland's stamp duty 'negatively impacting' central belt home sales

The Scottish Government's replacement for stamp duty is negatively impacting Scotland's property market, according to professional services firm JLL.

The firm has highlighted lower than forecast receipts from Land and Buildings Transaction Tax (LBTT) since it was introduced in April 2015, and called for rates to be revised.

Official figures analysed by the Scottish Property Federation (SPF) found that the tax generated revenues of around £481 million in 2016/17, almost £57 million below the Government's forecast and up around #65 million on the previous year's tax take.

The Scottish Government said the rate makes Scotland a "competitive and attractive location for business''.

Just over £214 million was raised from commercial property in 2015/16, dropping to around £177 million in 2016/17, JLL said.

Alasdair Humphery, of JLL in Scotland, said: "We've now passed the two-year anniversary of LBTT and it is clear to see a negative impact on Scotland's property market.

"For too long, commercial property receipts have been used to balance out an underperforming residential market, caused by heavy-handed taxation particularly at the middle and top ends of the market.''

The latest Scottish Property Federation figures suggest that the most recent tax targets set by the Scottish Government have fallen short by around £60 million, with commercial property receipts well down on last year's tally and behind expectations.

LBTT rates rise to 10% for homes valued at more than £325,000 to £750,000.

"The tax has undoubtedly stifled within this bracket, especially in central belt cities where homes are more expensive. Mid-market transactions, which are typically the life blood of any property market, have been restricted by this broad banding, making it hard for people to either buy larger homes or downsize to smaller ones,'' Mr Humphery added.

"By revising the threshold currently in place across sales from £325,000 to £750,000, we would most likely see an increase in buyer activity, to the benefit of the tax pot and the property market.''

A Scottish Government spokeswoman said: "Our approach on LBTT non-residential rates and bands helps ensure that Scotland is a competitive and attractive location for business.

"All business premises in Scotland up to and including £150,000 attract a zero rate of non-residential LBTT and all premises over £350,000 pay a lower rate of LBTT than the equivalent UK Stamp Duty Land Tax.