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LBTT pressure

Forbes pressed to follow Sunak on property tax

For sale, sold, homes, housing, property

Housing market in Scotland will ‘lose out’ says one agent (pic: Terry Murden)

Scotland’s Finance Secretary Kate Forbes is facing renewed calls to follow the Chancellor’s expected extension of residential property tax relief.

Rishi Sunak is believed to have conceded pressure from Tory backbench MPs to extend stamp duty relief when it expires next month. An announcement that it will remain in place until the summer is likely to be included in next week’s Budget.

Ms Forbes announced in her Budget last month that most of the thresholds on land and buildings transaction tax – Scotland’s version of stamp duty – will return to pre-pandemic levels from 1 April.

However, she faced immediate calls to reverse that decision in anticipation of Mr Sunak’s likely move.

Our story last month

Property market agent David Alexander who runs the Scottish lettings business Apropos, says there must be an extension of the LBTT holiday if there is to be a level playing field in the property market from April to June.

“There is already a clear argument for extending the increased threshold for Land and Buildings Transaction Tax as the Scottish Government has benefitted from £222.8m in revenue over the last five months,” he said.

“This is £39.4m more than was generated in the same five months of the previous year. The last three months of 2020 had the highest volume of transactions ever and also the highest revenue generation of any months since LBTT was introduced.

“If the finance minister Kate Forbes fails to match the stamp duty holiday there will clearly be a negative impact on the Scottish housing sector.

“The Scottish housing market will be put at a considerable disadvantage for the second quarter.”

He added that this is a “win-win tax reduction which has helped homeowners and also resulted in additional funds for the country”.

Forbes urges backing for Budget

Ms Forbes is urging MSPs to back the Budget Bill when it comes before Parliament for the first time on Thursday

She stressed that the Scottish Budget 2021-22 – incorporating additional measures outlined to Parliament last week including the extension of 100% rates relief for retail, hospitality, leisure, aviation and newspaper businesses for a further 12 months – reflected the priorities of all parties.

Speaking ahead of the Bill’s Stage 1 debate she said: “This is a consensual budget for unprecedented times. We are still dealing with a national emergency and only by working together across Parliament can we provide the support that our businesses, people and communities need.

“I have engaged widely to ensure we deliver not just the Scottish Government’s priorities of creating jobs, supporting our sustainable recovery while responding to the health crisis and tackling inequality, but also those raised by other parties.

“Further changes may be required once our funding position clarifies following next week’s UK Budget and I will continue working collaboratively to secure parliamentary support.

“The budget delivers £1.1 billion for jobs and skills, record spending for health services, £11.6 billion for local government plus a further £259 million of non-recurring coronavirus (COVID-19) funding, and new resources to tackle climate change.

“It lays a solid foundation for Scotland’s recovery and renewal and I look forward to it being supported across the chamber.”

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