Property taxes in Scotland have increased by nearly a quarter of a billion pounds in the last year compared to the pre-pandemic period, according to analysis of the latest statistics by DJ Alexander.
The level of the tax take has prompted the agency’s CEO, David Alexander, to accuse the Scottish government of a “cash grab”.
According to DJ Alexander, Scottish government revenues from Land and Buildings Transaction Tax (LBTT) were £247m (62.4%) higher in the 12 months to December 2022 compared with the same period in 2019.
Revenues received totalled £642.6m to the end of last year compared to £395.6m for 2019. The last six months alone have raised £380.4m and contain the six highest totals since LBTT was introduced in April 2015.
Over the last year £107.9m was raised from 1270 sales above £750,000, meaning each purchaser paid an average of £84,960 in tax on each property. A further £280.2m was raised from 16,760 buyers paying more than £325,001 for a property, which is the point at which the tax increases to 10%. In addition, £172.1m was raised from landlords, property investors, and second homeowners, which is equivalent to 26.8% of all revenue raised.
The last five months of 2022 were the highest monthly figures ever recorded, according to DJ Alexander’s analysis. Some £560.2m (87.2% of the total raised) was charged to those paying over £325,001 for a property, property investors, landlords, and second homeowners.
David Alexander, chief executive officer of DJ Alexander Scotland, commented: “At its heart LBTT, like Stamp Duty Land Tax (SDLT) in England, is a simple cash grab for governments. You can’t hide a home, so owners simply have to pay up or move to somewhere where the purchase costs are not quite as punitive.”
Alexander added: “If Scotland is to be seen as a progressive country wanting to attract the brightest and the best then we must ensure we have a property tax regime which is at least as fair and as competitive as our nearest neighbour. At present we risk putting off buyers, investors, landlords and second homeowners with a much more punitive tax take.
“We must have a tax system which is more broadly based and encourages homeownership, investment and the private rented sector. We should always be aware that those with more money always have the option of moving elsewhere and it would be a mistake to drive these individuals and companies away with excessive taxation.”
