Home sales in Scotland boosted by property tax change
Changes to Stamp Duty in Scotland have led to an increase in sales, according to analysis from estate agent Your Move.
It said that home sales have jumped by 11% annually in the first year of the new Land and Buildings Transaction Tax – the equivalent of Stamp Duty Land Tax in Scotland, compared to the 12 months before the tax was introduced.
Plus house prices have held steady in April, despite the new LBTT surcharge on buy-to-let properties and second homes, which was introduced to mirror the tax changes in England and Wales.
Fall in annual house prices
However, average house prices overall are down by 7.8% year-on-year, due to a lack of higher value home sales. The average house price in Scotland is currently £170,667.
Christine Campbell, Your Move managing director in Scotland, said: “By cutting the cost of purchasing cheaper homes, LBTT has led to an 11% increase in sales over the last year. With 104,344 home sales in the last twelve months, the market has outdone the previous year’s 93,601 sales.
“These figures confirm that lower purchase taxes for property can significantly boost activity in the housing market, while also making it more affordable for first-time buyers to get a foot on the ladder.
“However, house prices are still down 7.8% year-on-year in April, with a typical home in Scotland now worth £170,667. In part, this drop in property values was caused by a spike in high value home sales last year, before the LBTT was introduced, but today’s market hasn’t regained those losses yet.
“Since the introduction of LBTT, growth in house prices has been subdued. The average property value in Scotland has only grown 1.74% in the last six months, compared to 3.19% for England and Wales over the same period. The tax has particularly hit homes at the top of the market, as these properties have become more expensive to buy after the introduction of LBTT. So while there has been an upswing in sales, it has come at a cost for some.”