The Scottish Government has launched a consultation over the replacement of Stamp Duty Land Tax. The proposals would see it replaced with a Land and Buildings Transaction Tax. Finance Secretary John Swinney announced plans for the replacement, and claimed that the new tax would be more progressive and fairer.
The change would happen in April 2015, when there is a transfer of power from Westminster to Holyrood under the Scotland Act 2012 bringing Stamp Duty under Scottish control. As well as the change to the tax, there will also be a new tax-collecting body. Revenue Scotland will replace HMRC.
The new Land and Buildings Transaction Tax would be more closely linked to the value of the property involved. Mr Swinney argued that this would make the tax more related to the individual’s ability to pay.
Under the plans, those properties under £180,000 would not be liable to the new tax. Individuals buying a property valued between £180,000 and £325,000 would pay less tax than under the current stamp duty. Properties sold for more than £325,000 would be liable to more tax than under the present system.
John Swinney said:
“In today’s consultation on the proposed Land and Building Transaction Tax we have signalled our preference for a progressive system of taxation where the amount of tax paid is more closely related to the value of the property and therefore to the ability of the individual to pay.
“At the same time our consultation also indicates a willingness to adjust the threshold at which taxation is levied in order to support those at the lower end of the market.”
"To ensure that the views of the taxpayer and expert communities remain embedded in the development of our approach to taxation, we will also establish a Tax Consultation Forum to which representative bodies, networks and organisations with an interest in the tax system can contribute.
"This will complement our formal consultation structures."
David Mackie, Spokesman of the National Association of Estate Agents commented:
“We have long argued that the slab structure for stamp duty is unfair and creates huge distortions in the market, and we hope that the proposed ‘Land and Buildings Transaction Tax’ turns out to be a much fairer and more logical system.
“We applaud the Scottish government for recognising the important role that housing provides in the wider economy and call on Westminster to follow suit.”
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