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Replacing stamp duty in Scotland has been ‘operationally successful’

The introduction of a new tax to replace stamp duty in Scotland has so far proved successful, but a Holyrood committee has warned that it is ‘too early to draw any definitive conclusions’.

The Scottish Parliament’s Finance Committee has been scrutinising the introduction of the Land and Buildings Transaction Tax (LBTT), which replaced stamp duty north of the border in April 2015.

They have now asked the Scottish government to provide more detailed information on the impact of the new system, and in particular what effect it has had on Scottish house prices.


Finance secretary Derek Mackay told the committee that almost 9,700 homebuyers who would have had to pay stamp duty did not have to pay LBTT when purchasing a property, and that a further 41,700 paid less as a result of changes to the charges for properties costing between £145,000 and £325,000.

MSPs especially want to know the impact the change has had on the first-time buyer market, as there are no fees on homes worth up to £145,000, and if this has contributed to increased house prices.

They also want to know what impact the changes have had as far as investor trends are concerned when it comes to homes costing between £325,000 and £750,000, where the charges have increased.

Finance Committee convener Bruce Crawford commented: “It’s reasonable to say year one of the LBTT went smoothly and was operationally successful.

“That said, a key challenge for us has been the lack of consistency in the presentation of data relating to LBTT.

“That made it difficult to compare forecast and outturn data and to fully assess the tax’s impact on the property market in Scotland.”

He added: “Our committee therefore recommends that the Scottish government's review of the first year of LBTT includes an analysis of the behavioural response to LBTT, particularly in relation to homes costing between £325,000 and £750,000.

“This should include an assessment of the likelihood of an on-going response and an analysis of the impact of extraneous factors.” 


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