There is no getting around it: LBTT is having an adverse impact on the Scottish housing market. Those at the higher end of the market are choosing not to move because of the additional cost involved. And unfortunately this stagnation effect is filtering all the way down. People in the industry have been aware of this for a long time and looks like the government are beginning to wake up to the problem too. With recent changes to stamp duty in England, it would be surprising if Holyrood didn’t make changes to the controversial policy in its budget announcement on the 14th of December.
People purchasing at the higher end of the market tend to be discretionary movers – choosing to move out of choice rather than circumstance. If they see that money can be saved and invested in, say, a new bathroom or kitchen why would they choose to move? It is these considerations that the government must take into account as currently those at the higher end are blocking others from moving up the property ladder.
Jacquie Macdonald, Head of Corporate Development at Blair Cadell, said that:
"At Blair Cadell we are aware that when the Scottish Government introduced LBTT in 2015 it was a well intentioned and a socially motivated policy to assist first-time buyers. Sadly these change have not helped the first-time buyer.
"There is a chronic shortage of properties for sale on the market and those that are appearing are attracting multiple offers well above the Home Report value. We see this as a result of introduction of LBTT in 2015. It is discouraging people from putting their properties on the market.
"The Scottish Government needs to act now in the December 2017 budget to improve the market and the much needed receipts they get from LBTT. Extending the threshold of 5% to £925K would be helpful to free up the market and increase the government's receipts."