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Swinney should apologise for LBTT by Carl Warden
It’s refreshing to see a politician apologising. Last week John Swinney, the Deputy First Minister, manned up to say sorry for mistakes he’d made. However, I was disappointed to read that he’d seen fit to say sorry only for his role in the Named Persons Act, not for foisting onto Scotland his outrageous replacement for Stamp Duty.
John Swinney is quoted as saying he felt he had “made a misjudgement” and he’d “proved not to be helpful”, but I was stunned when I realised that he wasn’t talking about The Land and Buildings Transaction Tax (LBTT).
He was apologising for his role in the introduction of the Named Persons Act rather than LBTT, which was introduced by him when he was Cabinet Secretary for Finance, Constitution and Economy back in 2015.
Surely now we can expect a similar apology from him over LBTT and in fact an amendment to the ridiculous tax which would actually help Scots who – in some cases – have to pay almost double compared to their counterparts south of the border when buying property?
LBTT was a poor judgement from the Scottish Government from its conception and was never researched properly to work out exactly what sort of income it would generate for Holyrood.
To be frank, it’s performance has been woeful, not only because of the lack of income it has generated but also because it has stunted higher value transactions. Now is the time for the Scottish Government to alter the tax to put us back in line with the rest of the UK.
The tax has impacted negatively on the property market in Scotland, especially in rural areas, and means buyers are more tempted to purchase south of the border, where they won’t face such extreme levels of taxation.
For example, for the £325,000 to £750,000 property price bracket, Scottish buyers pay 10 per cent in tax and for £750,000 upwards, it’s an eye-watering 12 per cent. For the rest of the UK, the equivalent rates are 5 per cent and 10 per cent respectively.
To put it simply, the Scottish Government have got this wrong.
It is time it took responsibility for its mistakes and made the changes to help the Scottish people to buy a home without being hammered by excessive and unfair property rates.
Single-handedly this tax is harming our economy when you consider the number of businesses, and jobs, which benefit from a house sale. It’s time to bring us back in line with the rest of the UK, promptly and without delay.
Hopefully Mr Swinney will apologise for LBTT in the same way he has for ‘Named Persons’, and this time I hope he goes one step further and makes a tangible change that will make sure people aren’t penalised simply because they’re buying north of the border.
Carl Warden, Senior Associate, Bell Ingram LLP
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Published on 17th November 2017