Swinney unveils stamp duty boost for first-time buyers

FIRST-time buyers and low-income families are set to be handed a boost under new plans to scrap stamp duty, but those at the higher end of the property market will lose out.

Ministers are to pull Scotland out from the UK system and introduce a new land buildings transaction tax under fresh powers handed to Holyrood by the Scotland Act.

Finance Secretary John Swinney told MSPs that his government backed a “progressive system of taxation where the amount paid is more closely related to the value of the property and, therefore, to the ability of the individual to pay”.

Property experts in the Capital said there would be winners and losers and that the plans needed to be more balanced.

Under the current system, buyers of properties worth between £125,000 and £250,000 pay one per cent in stamp duty, with the rate set at three per cent for homes in the next bracket, up to £500,000.

The new plans would see new owners pay no tax on values up to £180,000 while those buying a home worth less than £300,000 would save significantly.

Alternatively, a progressive tax would still begin at £125,000, but with rates lower than the current system and all buyers under £325,000 saving cash. Those buying homes worth more than that would pay significantly higher duty.

Mr Swinney has launched a consultation which will help shape a new system for introduction in 2015. He also announced the creation of a new body named Revenue Scotland to collect tax instead of HMRC from 2015, which he said would be 25 per cent cheaper to run.

David Marshall, business analyst at the Edinburgh Solicitors Property Centre, said the plans would provide relief to first-time buyers.

He said: “When we recently had a stamp duty holiday for first-time buyers buying homes between £125,000 and £250,000 it didn’t stimulate a huge number of extra sales from people who wouldn’t otherwise have been looking to buy, but in the current economic climate it goes without saying that any financial savings will be appreciated by those looking to get on the property ladder.”

Steven Currie, of property firm Murray and Currie, said those buying at the higher end of the scale could feel hard done by under a new system.

He said: “It might not be entirely fair for under £180,000 to be completely free of duty and the higher end of the market pick up a much higher amount. Somewhere in between may well be fairer.”

But he added: “Bringing in a new system is great and kick-starting the market is a really good idea.”