Page not found
Scotland: End of stamp duty tax gains momentum
Stamp duty tax could be scrapped in Scotland, after the Scottish Government announced its intentions to overhaul the taxation system.
Addressing MPs, Scottish finance secretary John Swinney said the property tax - currently based on a percentage charge - would be replaced by a 'fairer' progressive tax. It is believed the change would bring benefits to about 95 per cent of the country's property market.
The passing of the Scotland Act 2012 in May this year means that the Scottish parliament will have the power to devolve and set its own rate of taxes from April 2015.
Making the announcement at the Scottish Parliament, he said the Government planned to introduce two new taxes; the land and building transaction tax to replace stamp duty tax, and an environmental tax which would replace the landfill tax.
He also unveiled plans to establish an independent tax body to collect and administer taxes known as Revenue Scotland which would replace the control of HMRC in the country.
Announcing a consultation into the new tax, Mr Swinney said: "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."
Currently, individuals buying a home in the UK over a certain purchase price must pay stamp duty land tax (STLT). In a move to encourage first time buyers, properties below £125,000 are exempt from the charge. Properties above this level are taxed on a percentage level ranging between one and 15 per cent of the whole price.
Under the proposals, new legislation would tax those buying homes worth more than £325,000 at a higher level than the current system. Homes below this level would pay less duty than current system, while those buying a home worth £180,000 or less would avoid the tax altogether.
Leading business and housing experts, including the National Association of Estate Agents and the Scottish Property Federation, welcomed the proposals and consultation.
However, speaking to the Herald Scotland, Debra Clapham, senior conveyancing lecturer at Glasgow University School of Law, warned that the proposals would discourage middle income earners from purchasing property, and effect high property priced areas such as East Renfrewshire, Aberdeen and Edinburgh.