09/10/14 - Matthew Gray's comments on the proposed reforms to stamp duty in the Scottish Budget

Matthew Gray is Managing Director of Property Services at Gilson Gray LLP and the NAEA (National Association of Estate Agents) Scottish Representative, comments on the proposed reforms to stamp duty tax announced in the Scottish Budget today:

The proposed changes to reform stamp duty tax and introduce a progressive tax on the sale of properties from April 2015, announced in the Scottish Budget today, is a significant change which will take some time for the market to digest.  While initially home buyers and sellers in Scotland will be concerned about the changes, the market will carry on as people realise there are still many reasons to buy and sell property.

The announcement should come as a welcome boost to first-time buyers and the lower-end of the market, and should help many to get their foot on the property ladder, with no tax on properties up to £135,000. Generally we would expect the first time buyer and lower-end of the market to warm up as these reforms come into play next year. For properties in the £135,000 to £250,000 bracket, the news also means just a 2% tax.

It is the home buyers and sellers on the higher-end of the market looking to buy and sell properties over the £250,000 threshold that will start to feel the effect of the new reforms.  This bracket will be hit by the proposed 10% tax on ‘the difference’ above that £250,000 cap up to properties worth £1million – a significant figure for properties of such value. Of greater significance is the 12% rate for houses over a £1million – of which there are plenty of properties of this price bracket for sale in Scotland. With the proposed changes, we expect to see an increase in activity from the higher-end of the market prior to April 2015, with those buyers and sellers looking to move putting their homes on the market and buying property ahead of the stamp duty tax reforms.

Although this is a fair reform for Scotland, where the average price of properties are lower than the national average, the changes will still prove hard hitting for those at the top of the market. The cut-off point where the buyer will pay more than they currently pay under current stamp duty rates will be around £325,000. At the top end where there is no competition for the property the cost of the new tax may come off the value of the property.

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For More Information Contact:
Matthew Gray
Mobile: 07730 0010153
Direct Dial: 0131 516 5367
Email: mgray@gilsongray.co.uk

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The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.