Top of market sales remain slow
LBTT revenue falls for first time since May
Taxing issue: sales of top end properties remains slow
Revenue from the Scottish government’s Land and Buildings Transaction Tax (LBTT) has fallen for the first time since May as owners of higher value homes struggle to find buyers.
Figures from Revenue Scotland, analysed by the Scottish Property Federation, show a fall in LBTT revenue in September of £2.1m to £49.8m.
Revenue from commercial property sales is expected to miss government targets by a large margin.
However, the strength of the second homes tax (the additional dwelling supplement) means overall property revenue is running at a higher level than in the previous two years of LBTT.
Despite the decreased monthly revenue, compared to September in 2016, the total revenue has increased by £11.9m.
Revenue so far this year is £281.6m, a significant rise compared to the same period in 2016/2017 of £222.9m and £183.4m in 2015/2016.
“We continue to be concerned that the high rate of tax (10%) which kicks in with properties valued between £325,000 and £750,000 is deterring would be sellers and consequently depressing the supply of these properties to the market – this 10% tax threshold should start from no less than £500,000 in our view.”
The SPF is also concerned at a lack of higher value transactions in the commercial property markets.
“The revenue from the commercial side of LBTT looks set to miss its £224m government forecast by a significant margin, having only accrued £79.2m in the first half of the tax year.
“The SPF remains concerned at these figures as Scotland’s commercial property market continues to show low levels of activity at the higher value levels. This suggests there is currently not enough depth to the markets and a lack of new property development in particular.”