ESTATE agents have been inundated with inquiries from sellers of £254,000-plus homes rushing to get their properties on to the market before the Scottish Government’s Land and Buildings Transactions Tax (LBTT) comes into force in April.
Under new Stamp Duty reforms unveiled by Chancellor George Osborne on Wednesday, high-end home-buyers will pay less tax when buying a property from now until the Scottish Government’s own reforms come into force in four months.
Those who had been considering putting their homes on the market are now flocking to do so, to take advantage of cheaper rates under the new Westminster system, which replaces the previous “slab system” of Stamp Duty levies.
The property value at which the LBTT becomes more expensive than the Westminster version is £254,000.
Homes in this bracket in Scotland’s three major property hotspots – Edinburgh, Aberdeen and Glasgow – make up 27 per cent, 25 per cent and 8 per cent of sales respectively.
Solicitors in the three cities said they anticipated a busy month for property sales in traditionally quiet January as a result of the changes.
The LBTT will see anything paid for a home between £250,000 and £1 million taxed at 10 per cent in Scotland, rather than the 5 per cent south of the Border.
Meanwhile, Tory leader Ruth Davidson said yesterday that she would lodge an amendment to have the LBTT blocked in the Holyrood budget, amid concerns that it would disadvantage “middle income” home buyers.
David Marshall, spokesman for Solicitors Property Centres Scotland, said there had already been a number of people with homes worth £325,000-plus – who would have benefited from the former Stamp Duty system over the LBTT – rushing to put their homes on the market at the end of November.
“Following this, already today we have seen quite a few queries about the changes and it looks like this trend is going to continue over the next few months,” he said. “I think about two minutes after our Edinburgh showroom opened, we had already received a couple of calls from people saying they were looking to get their home on to the market as quickly as possible.”
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Mike Cunningham, head of residential property at the Aberdeen branch of solicitors Ledingham Chalmers, said the office had received a high number of queries within hours of the new rules coming into effect.
“I think a lot of people will hold off actually putting their property on the market until after Christmas, but they are keen to do so before April,” he said. “I think we will see one of the busiest Januarys in quite some time.”
Robert Carroll, managing director at estate agency Mov8 in Edinburgh, said he had received a call first thing yesterday morning from a seller wanting to put her Royal Mile flat on the market as soon as possible, to take advantage of the new Westminster rules.
“We were only open two hours before we received our first call from a client looking to get their property on to the market and explicitly saying that the change in the Stamp Duty regime was behind their decision,” said Mr Carroll.
During First Minister’s Questions at Holyrood, Ms Davidson said she planned to table an amendment to the Budget Bill for 2015-16, adding that she would campaign “night and day” for changes to the tax.
She said: “Under this government’s Swinney tax, we now know that if you want to move up the property ladder, it is going to cost thousands of pounds more. It is a left-wing, nationalist tax on aspiration.”
First Minister Nicola Sturgeon insisted that, Scotland-wide, more than 80 per cent of purchases would attract tax of either zero or less than under the new UK system.
“The Scottish rates reflect the nature of the Scottish housing market, as they should,” she said.
South of the Border, sellers of multi-million pound homes in London were reportedly paying sweeteners of £10,000 to their solicitors to ensure deals were pushed through before the new regulations came in at midnight on Wednesday.
Anyone paying more than £937,000 for a property would receive a bigger bill under the new rules.
Under the new regulations brought in by Westminster, a buyer of a £2.5m home will have to pay £38,750 extra, while a £10m mansion will attract £413,750 more tax.
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