House profit tax

Donald Lewis (Letters, 9 December) bemoans an additional tax cost of 0.77 per cent on a £300,000 house, a price very much higher than the average price of houses throughout Scotland, even within the Edinburgh bubble.

He appears to have overlooked the indefensible tax-free gains that many buyers have in the back of their minds when bidding up prices to absurd levels in the first place.

Surely it would be fairer to all taxpayers if gains made on homes were taxed, after making due indexing allowance for inflation and the cost of any capital additions.

This would reduce the cash uselessly flowing around the property market and divert it to socially useful purposes via the state.

It has been predicted in some quarters that any increases in transaction taxes will effectively be paid by the seller by way of a reduction in the selling price.

It is really disappointing that many of the well-to-do squeal about a modest reduction in unearned wealth that will accrue to them while many of their fellow citizens face real deprivation and economic challenges on a daily basis.

Clive B Scott

Hillhead Drive

Falkirk

Donald Lewis wrongly asserts that buyers of houses in Scotland will be worse off than those to the south of the Border.

In reality it is only those buying houses which cost more than £254,000 who will be disadvantaged. There will always be differences in levels of tax raised under separate systems, unless the taxes are pegged to each other.

That has been the problem with the early tax-raising powers granted to the Scottish Parliament.

Instead of varying the amount of income tax collected, none of the ruling parties ever dared to raise or even reduce the amount of income tax paid by those living in Scotland.

The introduction in Scotland of the Land and Buildings Transfer Tax in place of Stamp Duty has forced the Scottish hand, especially since finance secretary John Swinney declared his rates before George Osborne updated the rates of Stamp Duty.

Donald Lewis compared the tax on like-for-like house prices and found those buying the more expensive houses in Scotland much worse off than those in the rest of the United Kingdom.

However, when one compares like-for-like houses one discovers that the tax varies significantly, with the amount paid on a four-bedroom detached house being considerably more in London than in Scotland, and more in certain parts of Scotland than in many remote rural or deprived inner city areas in other parts of the country.

The new Scottish tax is not a tax on the aspirations of people to own their own homes, since it actually encourages first-time buyers of the more modestly priced houses, but rather it is a tax on those who wish to buy more than a basic property.

In addition, if Mr Swinney discovers that he has set the rate too high he can always adjust the rate, perhaps by following George Osborne’s lead with an additional intermediate 5 per cent band.

Sandy Gemmill

Warriston Gardens

Edinburgh