The SNP’s new stamp duty equivalent for Scotland, the Land and Buildings Transaction Tax (LBTT), appears to have been designed to send a clear message to the well off in Scotland – expect devolution to mean you pay more tax.
The revisions to the tax made yesterday didn’t do much to water down that message. In response to the UK government’s stamp duty changes in December, the SNP clearly felt they had gone a tad too far with the tax and, as I note in this post, they introduced a new 5% rate and shifted the level the 10% comes in to a higher level.
However, at the same time – just to make it clear that it is the “rich” they are after, they cut the rate at which the 12% rate kicks in from £1m to £750,000.
| Scotland | Rest of the UK | ||
|---|---|---|---|
| Up to £145,000 | 0% | Up to £125,000 | 0% |
| £145,000.01 – £250,000 | 2% | £125,000.01 – £250,000 | 2% |
| £250,000.01 – £325,000: | 5% | £250,000.01 – £925,000 | 5% |
| £325,000.01 – £750,000 | 10% | £925,000.01 – £1,500,000 | 10% |
| £750,001+ | 12% | £1,500,000.01+ | 12% |
How does that affect home buyers? The chart below, from estate agent Rettie & Co, sums it up.
Buy a house for £900,000 and you will pay 90% more in tax in Scotland than you would in the rest of the UK. The second chart tells the same story.
Not the kind of thing that seems likely to encourage wealth creators to head for Aberdeen or Edinburgh.