Agents hope for property tax review in Scottish Budget

Agents are hoping for further support for the housing market north of the border as the Scottish Government prepares to set its 2024/2025 Budget.

A draft Budget will be presented to the Scottish Parliament on Tuesday 19 December.

Agency trade body Propertymark has called for three housing areas to be included, creating a fairer private rental sector, increasing places and homes for people to live and help on reducing energy bills.

One suggestion includes incentivising homeowners to downsize by offering a land and buildings transaction tax (LBTT) exemption for ‘last-time’ buyers.

Timothy Douglas, head of policy and campaigns at Propertymark, said: “Propertymark and our member agents recognise the key challenges that the Scottish Government faces with continued constraints on public finances, challenges from the Covid, Brexit and the cost-of-living crisis. 

“However, action is needed to address the housing emergency in Scotland and increase the number of places and homes for people to buy and rent as well as support the move towards decarbonisation and help reduce energy bills in people’s homes.”

Scottish agency brand DJ Alexander has also called for stimulus for the private building sector and a revision of the current LBTT.

David Alexander, the chief executive of DJ Alexander Scotland, said: “Politicians always talk of fairness, and that those with the broadest shoulders should bear the greatest burden, but we can see that income taxes in Scotland increasingly target those who would not traditionally be regarded as wealthy and property taxes unfairly hit first time buyers harder than in the rest of the UK.

“First time buyers are punitively charged at a much earlier level than their English counterparts with the tax starting at £175,000 compared to £425,000 in England and Wales. Equally the 10% rate of property tax is charged from £325,001 in Scotland while this rate isn’t achieved south of the border until properties are worth more than £925,000. 

“Many people can afford to buy properties worth £325,001 yet would never regard themselves as wealthy. We now have a remarkably high burden of property taxation being placed on the shoulders of middle earners which includes teachers, nurses, office workers and others.”