Scotland’s prime property market is experiencing a boom before the alternative to Stamp Duty comes into effect in April.
An increase in demand of prime property in Scotland resulted in a 1% increase in property value following a strong end to 2014.
New Tax Legislation
The main reason for the increase is due to the new Land and Buildings Transaction Tax. Under current rules a house costing £900,000 will incur a stamp duty payment of £35,000, however under the new LBTT system for the same property will incur a higher tax at £67,300.
Under the rates proposed in the LBTT system, any sales above £254,000 will incur a higher rate of tax compared with the current stamp duty structure. The property index also indicates that as well as many wanting to make a saving before the tax change, the political stability in the country following the referendum outcome has also played a pivotal role.
Political & Financially Motivated
The report states: “After months of doubt about the outcome of the referendum, buyers now feel more secure about making a decision to move house or purchase a property.
“The proposed LBTT rates published in October clarified how purchase taxes would change in April.
“The higher upfront cost of moving when LBTT comes into force, especially in the prime market, has prompted some home buyers and vendors to make quick decisions.”
Ran Morgan, head of Scotland residential at Knight Frank said: "We expect this trend will continue into the New Year, driven by a desire among vendors and homebuyers to move before the introduction of the new LBTT levy in four months’ time."
If you require legal advice or representation regarding the new land tax or require legal help regarding a property issue or dispute, contact our team of dedicated solicitors using our online contact form.