0:01 AM, 29th September 2023, About A year ago
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Scotland’s property tax revenues reached a new record high per transaction in August 2023, according to an analysis by a leading property firm.
Scotland’s largest lettings and estate agency, DJ Alexander, says the Scottish Government collected £64.1m from Land and Buildings Transaction Tax (LBTT) in August 2023 from just 8,950 sales.
This means that the average cost of LBTT per transaction was £7,162, which is the highest ever recorded.
The total revenue figure was the third highest ever, with the top eight months occurring since July 2022.
The firm says that the highest ever month was October 2022, when £65.8m was raised from 10,050 sales.
David Alexander, the chief executive of DJ Alexander, said: “We can see that LBTT continues to be a major money earner for the Scottish government with second homeowners and property investors being particularly hard hit.
“But with just 1,600 buyers contributing 83.4%, it is clear that there is a diminishing pool of people providing the bulk of this income.”
He added: “Given that the threshold for higher property taxes in Scotland is £325,001 it is increasingly obvious that the people who are paying the most are often the people who are fundamental in doing the jobs which help keep our society going.”
The analysis also revealed that most of the revenue came from a small number of high value sales that did not attract an additional dwelling supplement (ADS).
ADS is a 6% surcharge on top of LBTT for second homes and investment properties.
There was £42.9m collected from sales without ADS in August 2023, and £35.8m of this came from just 1,600 sales.
This means that each of these sales paid an average of £22,375 in LBTT, and that they accounted for 83.4% of the revenue from 17.9% of the sales.
A total of £21.2m was collected in ADS in August 2023, which was 33.1% of the total revenue.
Mr Alexander also criticised the Scottish government for targeting homeowners with higher taxes throughout their lives, such as increasing council tax charges for band E properties and proposing a Scottish version of inheritance tax (IHT).
He said: “While these higher taxes are often presented as being focused on the rich it is clear that many homes worth over £325,001 are not the preserve of millionaires or ‘greedy bankers’ but of ordinary working people who are finding that buying a home has become a major tax burden in their lives.
“Given that the majority of people’s estates are comprised of their home we can see that the burden of tax is now being targeted throughout the whole of property owners’ lives.
“From higher charges for first time buyers, higher LBTT rates at a lower starting price and a punitive tax on death there is a higher charge for every period of home ownership.”
He added: “Homeownership has become a cash cow for governments intent on punishing rather than rewarding people for buying a home.
“It is clearly not fair, and this is not the way to make Scotland a more attractive place to live, work, and invest.”
