Tories hit out as property sales tax generates additional £250m

Money generated from Land and Buildings Transaction Tax (LBTT) has increased by 60% in the last six years, the Scottish Conservatives have highlighted.

The tax, which was introduced in April 2015, generated £415.8 million in 2015/16 but that rose to £666.9 million in 2021/22.

The increase of £251.1 million has been attributed to rising house prices and static tax bands, with the average house price in Scotland surging 15% in recent times.

This has meant more Scots have become liable for the tax, the Tories say, and the party highlighted there were more than 18,000 additional sales paying LBTT in 2021/22 than in the first year of its existence.

At the same time, more of Scotland’s properties have ended up in the higher rates – the number of sales paying 10% (those more than £325,000) and 12% (more than £750,000) have doubled, the party says.

Meanwhile, the number of property sales which do not require the tax to be paid (under £145,000) has fallen by more than 8,000.

The Scottish Conservatives previously called for the LBTT threshold to be raised to £250,000, raising the issue in its manifestos for 2021 and 2022.

The party’s housing spokesman, Miles Briggs, accused the Scottish Government of “making a killing from a broken housing market”.

He said: “At a time when rising house prices are making home ownership unaffordable for so many Scots, it is shocking to see the SNP Government making such a huge tax windfall.

“This SNP Government is making a killing from a broken housing market they created by failing to meet their own affordable house-building promises.

“Homebuyers tax revenue has doubled since 2015, yet the SNP have closed schemes like Help to Buy and the First Home Fund designed to help first-time buyers.”

A Scottish Government spokesperson said: “Revenue raised from LBTT supports vital public services in Scotland. That includes helping ensure good quality housing is available and since 2007 the Scottish Government has delivered 111,750 affordable homes.

“The progressive rates and bands which the Scottish Government has introduced for LBTT have prioritised support for first-time buyers and assisted people as they progress through the property market.

“First-time buyers pay no LBTT on the first £175,000 spent on a property in Scotland, saving up to £600 in LBTT, with most first-time buyers paying no LBTT at all as a result.

“The Scottish Government’s tax measures are intended to deliver stability and certainty for taxpayers. The Scottish Government continues to consider all available evidence on the impact of the arrangements for LBTT on Scotland’s housing market.”