Property market bottleneck warning over LBTT
Ross MacDonald, director of sales at Edinburgh-based specialist estate agency Portolio, has also called for an urgent review of the Land and Buildings Transaction Tax (LBTT), questioning whether it will be fit for purpose in the post-pandemic market.
Mr MacDonald, whose agency focuses on working with landlords, added his weight to industry calls for the temporary relief on LBTT to continue beyond its current March 31 end date.
A temporary extension in the nil rate band of the tax from £145,000 to £250,000 was introduced by the Scottish government as part of its response to the Covid-19 pandemic.
Mr MacDonald argues the rush to meet that deadline in the wake of the normal festive slowdown in sales risks putting too much pressure on the market at a time when stability is vital.
The National Association of Estate Agents (NAEA) has also called on Scottish ministers to grant an extension of at least six months to the tax holiday.
Mr MacDonald, who co-founded Portolio to help landlords buy and sell tenanted properties, said: “With the average property deal these days taking at least eight weeks from sale to completion, there’s no time to hang around as things stand for anyone hoping to take advantage of this tax break.
“This is either going to put huge pressure logistically in every step of the market to get deals completed – or may actually put people off making purchases because people fear they will be unable to afford the property if they run out of time, while incurring fees along the way.”
Mr MacDonald said on properties up to £250,000 buyers could currently save as much as £2,100 in LBTT on the purchase price.
Beyond the immediate extension call, he believes wider changes to the tax system should also be considered.
He said: “There seems to be a swell of opinion that LBTT should be amended to be more in line with Stamp Duty in England. That’s something we would certainly welcome the Scottish government investigating the potential benefits of.”
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