Scottish Budget

Homes tax falls £833m short of Holyrood target

Property for saleReceipts from the residential Land and Buildings Transaction Tax will be £833 million less than estimated, over the remainder of the Scottish parliament.

The Scottish Government expected to raise £1.795 billion between 2017-18 and 2020-21. However, in yesterday’s budget this figure was revised down to just £962 million.

Scottish Tories leapt on the data to say that it proves that the housing market in some parts of the country has stagnated, and has led to a significant drop in tax revenues.

Scottish Conservative shadow economy secretary Dean Lockhart said:The SNP was well-warned by ourselves and those in the housing market that there were problems with its stamp duty plans.

“It was clear that by setting the rates this high it could lead to a slowdown, and as a result tax revenues would decline.

“The SNP totally ignored these warnings however, and these latest figures from the budget prove that the housing market in some parts of the country is starting to stagnate.

“It means that we now have a situation where house buyers and the taxpayer are losing out as a result of the SNP’s flawed LBTT plans.”

There were hopes that the government would revise the LBTT bands in order not to penalise those at top end of the market, but Finance Secretary Derek Mackay chose to leave them unchanged.

This means Scots pay higher tax for lower priced property than in England. The government argues that this better reflects the nature of housing values north and south of the border.

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