Agents demand immediate tax action to help market

NAEA Propertymark has written to the Scottish Government demanding it extend the current Land and Buildings Transaction Tax holiday - the stamp duty holiday equivalent north of the border.

It also wants the SNP administration to change the steep thresholds home buyers’ experience between buying a house in different tiers of the tax.

It says that by acting now, the Holyrood administration can revitalise the housing market and avoid “a disorderly and distressing period for movers and businesses throughout the market.”

Propertymark wants an extension of the LBTT holiday of at least six months to be announced before Christmas to reduce the risk to the consumer, and for the government to work with Scottish agents to develop a method to help smooth the end of an extended LBTT holiday to prevent another cliff edge.

Agents says that post-lockdown, property transaction levels in Scotland have now accelerated sharply and between August and October the number of homes coming to market rose by 44.4 per cent while the volume of property sales was down 5.6 per cent compared to last year.

As a result average prices are up 7.9 per cent compared to last year. 

However, as is expected for this time of year, the seasonal lull in house buying and selling is taking place. 

Propertymark says: “This is leading to concern that without an extension to the LBTT holiday, this lull will continue into the New Year and with the worry that consumers will miss being able to make the most of the LBTT reduction when the market picks up again.

“This will cause movers to apply pressure to complete transactions by  March 31 2021 to benefit from the changes to LBTT. Failure to complete those transactions could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay LBTT.”

Daryl McIntosh, Propertymark’s strategic development manager for Scotland, says: “We’re calling on the Scottish Government to step in and consider a tapered ending and extension of the holiday and to address the steep threshold that home buyers’ experience between buying a house in the band from £325,001 to £750,000. 

“This will allow pressure on the system to be released so allow transactions to complete and avoid a disorderly and distressing period for consumers and businesses throughout the market.”