13 Jul 2017

Surveyors join calls for Scotland's property taxes to be reformed

Surveyors join calls for Scotland's property taxes to be reformed

Pressure continued to mount today on the SNP to move quickly to overhaul its controversial new property tax which replaced the old stamp duty system.

Latest criticism of the Land and Buildings Transaction Tax (LBTT) has come from the Royal Institution of Chartered Surveyors.

RICS wants Finance Secretary Derek Mackay to urgently review the policy as it has caused a property bottleneck.

RICS spokesman Hew Edgar said in an interview today: "A predicted post-election bounceback in residential property transactions has been patchy due to price pressures and issues in certain sections of the market created by the bandings in LBTT.

"The issues due to the LBTT bandings must be addressed to tackle the bottleneck created by those who are put off moving property and are adopting the 'improve, don’t move' mentality.

"We urge the Scottish Government to review the LBTT framework and devise a banding and threshold structure that would improve market fluidity and address the current uncertainty which is stymying property transactions."


Scottish surveyors have been critical of LBTT in the comments section of the latest RICS residential market survey for the UK.

Edinburgh surveyor John Brown said LBTT is a "fundamental market interference" in Scotland, particularly in the £500,000-plus price bracket, where significant sums (of LBTT) become due.

"This is causing distortion in market demand," he added.

Finance Secretary Mr Mackay said last month that he was willing to reconsider the stamp duty replacement after LBTT was blamed for stagnating sales.

He indicated he was willing to look at shifting the bands for LBTT, potentially saving homebuyers thousands of pounds.

Revenue shortfall

The new tax replaced stamp duty in 2015, but has consistently failed to raise as much revenue as expected amid claims the measure was poorly designed.

Official figures show property transactions in the top half of the housing market have gone into reverse since the tax was introduced, with LBTT now expected to raise as much as £800million less than forecast over the life of the current parliament.

Property purchasers are charged a percentage based on sale value, starting from £145,000. The levy is 2% on purchases between £145,000 and £250,000; 5% between £250,000 and £325,000; 10% between £325,000 and £750,000; and 12% on properties costing more than £750,000.

Mr Mackay said in last month's newspaper interview that he is willing to raise the upper limit of the 5% band to £500,000, easing the tax burden on thousands of homebuyers in the middle of the property market.

If the change is carried out, it could provide an average saving of £9,000 to affected buyers.

Scotland's property experts

If you are looking to buy, sell or lease property, Aberdein Considine can offer you the support of some of the most experienced property professionals in the country.

We are also an independent broker of mortgages and can offer home loans without any hidden fees.

If you would like to speak to a member of our team, call 0333 0066 333 or click here.

* Your home may be repossessed if you do not keep up repayments on your mortgage.

Please correct the errors below before submitting your request:

Get in touch

Our dedicated client contact team prefer to receive enquiries through our contact form. We'll endeavour to get back to you within 24 hours or during the course of the next working day.

Tick this box if you wish to receive news and offers from Aberdein Considine. By doing, you indicate your consent to receiving targeted email marketing messages from us. On each occasion that we contact you in the future, you will be given the option to opt-out from receiving such messages. You may also email marketing@acandco.com at any time to opt-out.

The personal information that you provide to us in this form will only ever be used by Aberdein Considine (as the Data Controller) for the following specifically defined purposes:

  • email you content that you have requested from us
  • with your consent, occasionally email you with targeted information regarding our service offerings
  • continually honour any opt-out request you submit in the future
  • comply with any of our legal and/or regulatory obligations