Ministers need to accept they’ve ‘got it wrong’ and make changes to Scotland’s new LBTT stamp duty

Carl Warden, of Perthshire-based Bell Ingram, is disputing comments by the Scottish Government that the introduction of the tax has been an “operational success”, claiming it is stunting the £325k plus housing market – especially for large rural properties – and its revenue is falling short of targets.

Land and Buildings Transaction Tax (LBTT) was introduced in Scotland in April 2015 in place of UK Stamp Duty Land Tax (SDLT), with the aim of creating a tax charge that is more proportionate to the actual price of the property.

It means people buying a home in Scotland pay LBTT linked to a sliding scale aligned to the cost of the property – but the rate is vastly different from that in place in England.

Carl emphasises that once the 10% LBTT bracket for properties costing £325,000 to £750,000 is reached, the Scottish tax quickly escalates compared to the rest of the UK, for example a property costing £350,000 will result in £8,350 LBTT compared to £7,500 SDLT. This then quickly adds up, rising to a staggering £78,350 LBTT compared to £43,750 SDLT on properties over the £1million mark – a 179% increase comparison.

These numbers also exclude any further taxation for second home purchases, which would attract an additional 3% of the whole purchase price.

Carl, who has over 28 years experience in the property industry, says that this information can, and has, stopped potential buyers in their tracks, resulting in them choosing not to proceed any further with the sale.

He said: “This is not a time for the Scottish Government to be proud. LBTT is clearly not working, and now is the time to make a change and realise they got it wrong.

“When I meet people who are looking to buy, their jaws hit the floor when they start to appreciate the scale of how much tax they have to pay.

“Transactions attracting this level of tax are making people do one of two things; either not move at all, or negotiate hard on the asking price based on the vendor reducing their price by the level of tax due.

“It is important to highlight that this is not just an issue for people at the higher end of the property market. If sales stop it – or prices are curbed – it ripples down the property ladder; putting further pressure on first time buyers.

“To show just how big the gap is becoming between the Scottish tax and that of the rest of the UK, we recently sold a property at £1.15m for which the LBTT was £96,350, compared to stamp duty at only £58,750 – that’s a £37,600 difference.

“This transaction also attracted an additional 3% second home tax of £34,500, which was a grand total of an eye watering £130,850 in purchase taxes.”

Bell Ingram’s role as a national land and estate agency firm means it is able to provide a unique perspective on the varied outcomes of the tax, informed by a wide network of agency offices across the country.

Established 117 years ago, Bell Ingram has 130 professional staff across 11 UK offices including: farm, estate and forestry managers; chartered surveyors, estate agents, architects, planners, and building surveyors; and tourism, GIS mapping, and renewable energy specialists.

Our people

Carl Warden

Partner
Estate Agency
Tel: 01738 621 121

About: Carl heads up the Residential Estate Agency division for the company and has a proven track record within the Scottish property sector. He has been marketing property in the Perth and Kinross area for over 35 years and has vast and detailed practical experience and knowledge of selling prime residential property: from period homes to contemporary developments. Carl is well known in the local area, having developed excellent relationships with buyers and sellers. His wider role involves looking after and supporting our Agency teams and colleagues in Oban, Beauly, Ayr and Forfar. Interests: Estate Agency, Market Valuation, Negotiation.

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Avian Influenza Prevention Zone in Scotland is extended until 28th February 2017

There is a GB-wide ban on poultry shows and gatherings, and the Prevention Zone applies to all poultry and captive birds in Scotland, requiring poultry keepers to keep their birds indoors, or take appropriate practical steps to keep them separate from wild birds. All bird keepers must also take extra steps to ensure good biosecurity on their premises and minimise the risk of infection and further spread of Avian Influenza, such as:

• making sure that birds’ feed and water can’t be accessed by wild bird.
• voiding transfer of contamination between premises by cleansing and disinfecting equipment, vehicles and footwear.
• reducing the movement of people, vehicles or equipment to and from areas where poultry or captive birds are kept.
• implementing effective vermin control around buildings where poultry or captive birds are kept.
• providing wash facilities or dips containing approved disinfectant (at the right concentration) at key points such as farm entrances and entrances to bird houses.

Avian Influenza is a notifiable disease. If you suspect an animal may be affected by a notifiable disease report it to your local Animal Plant and Health Agency office. Contact details can be found at http://www.defra.gov.uk/ahvla-en/about-us/contact-us/field-services/ and further information such as biosecurity guidance is available from the Scottish Government website www.gov.scot/avianinfluenza.

The H5N8 strain of Avian Influenza has been circulating in Europe for several weeks.  The disease has also been found in wild birds in Wales, England and Scotland. and within the domestic flock confirmed  in Lincolnshire on 16 December 2016, and Carmarthenshire on 3 January 2017. The last Scottish Avian Influenza outbreak in captive birds was Low Pathogenic H5N1 in Dunfermline, January 2016. 

Under the Prevention Zone, birds and eggs are still considered free range provided they meet all other requirements. Declaring a Prevention Zone means birds can be housed for up to 12 weeks and still maintain their free range status. The 12 week limit applies to individual birds or batches, not premises as a whole.

Members of the public are asked to report these incidents to Defra’s national helpline (email defra.helpline@defra.gsi.gov.uk or telephone 03459 335577, Mon-Fri 8am to 6pm). DEFRA/SG have issued a  news release and provided information for poultry keepers on their Frequently Asked Questions page. If poultry owners have specific questions about complying with the requirements of the Avian Influenza Prevention Zone, they should speak with their private vets or their local Animal and Plant Health Agency (APHA) office.

Article posted on 06/01/2017