Commercial revenue from Scotland’s stamp duty replacement fell by 31 per cent in June compared to the same month in 2016, it emerged yesterday..
Scottish Property Federation said the fall in Scottish Land and Buildings Transaction Tax (LBTT) is worrying and calls on Scottish Government to do more to support the property sector.
Data released yesterday by Revenue Scotland, the country’s devolved taxes authority, disclosed that revenues from the commercial element of the tax totalled £11.2 million last month, significantly down from £16.3m last year.
The figures, analysed by the Scottish Property Federation, led to the organisation saying that they point to the continued slowing of the commercial property market in Scotland.
In the first six months of 2016 the Scottish Government raised over £100m from commercial LBTT returns, however, the same period in 2017 has seen revenue of only £85m.
It was hoped that 2017 would see the commercial property market in Scotland recover after it the total value of sales contracted by 13 per cent in 2016.
Andrew Sutherland, Vice Chair of the Scottish Property Federation (SPF) and Joint Managing Director of Miller Developments said: “A strong and healthy commercial property market not only contributes to government coffers via LBTT, but also provides Scotland with high quality jobs and economic growth.
“Today’s figures are worrying and serve to reinforce our calls for the Scottish Government to do more to support the property industry and the wider Scottish economy. Scotland needs to remain positive and open for business in order to secure appropriate new investment and development.
“Uncertainty and low economic growth prevents the commercial market in Scotland achieving its full potential.”
The SPF represents 185 organisations operating in Scotland, including property investors including major institutional funds, developers, landlords of commercial and residential property, and professional property consultants and advisers.
LBTT has proved controversial since its introduction two years ago with experts blaming it for slowing the middle and top end of the residential property market. Earlier this month LBTT was said to be partially to blame for figures showing sales of residential properties were down 17 per cent in March compared with the previous year.
In May the Council of Mortgage Lenders revealed the number of home movers in Scotland had dropped by eight per cent since last year. A Scottish Government spokesman said property sales were holding up compared with the rest of the UK.
The spokesman said: “We closely monitor the market and will take all market data into account when setting LBTT rates and bands. Since the introduction of LBTT in April 2015, nearly 7,200 businesses have benefited from a zero rate of non-residential Land and Buildings Transaction Tax given our £150,000 tax threshold.”