EXPERTS concerned about potential disruption to a timid revival in commercial property activity are urging the Scottish Government to make a swifter decision on how these deals will be taxed under newly devolved powers.
Last week, Holyrood’s finance committee gave its endorsement to the land and buildings transaction tax (LBTT), which is due to replace stamp duty in Scotland from 2015.
A banding structure will exclude as many as 70 per cent of residential homes from any sales levy, with the lost tax made up by higher rates on more expensive homes and commercial sites.
However, a final decision on the levels of rates is not due until September 2014. Nick Scott, head of property at law firm Brodies, said the delay is leading some developers to question whether to push ahead with Scottish projects.
“The bill will still apply to deals agreed today if those projects aren’t completed before 2015,” Scott said. “It is creating confusion, which I don’t think was what the Scottish Government intended, but the fact is commercial markets hate uncertainty.”
Scott gave evidence during the finance committee’s review of the bill, and was pleased to see that last week’s report acknowledged these concerns. He said it is now “over to the government” to heed the advice of its committee.
Stamp duty and land taxes raised £330 million in Scotland in 2010-11, with £165m of that generated by residential property deals.