TAX experts have cast doubt on the practicality of the Scottish Government’s £600 tax break for first-time home buyers, and warned it would exclude blameless refugees.

Accountants questioned how it would be possible to police a scheme that is meant to be off limits to people who own a property anywhere else in the world.

One group said it would unintentionally exclude refugees who had lost their previous homes in other countries because of war and natural disaster.

The concerns were included in responses to a recent government consultation on a first time-buyers’ relief for Land and Buildings Transaction Tax (LBTT).

Mirroring a scheme announced by Chancellor Philip Hammond last year, the Scottish version began on June 30, and should benefit around 12,000 people a year.

For all buyers, the first £145,000 of a home purchase is zero-rated for LBTT.

But for first-time buyers in Scotland this tax-free band has been raised to £175,000, sparing them a 2 per cent levy on the extra £30,000, a saving of £600.

Ministers say the changes will help ensure 80 per cent of first-time buyers pay no LBTT.

But experts warned the relief would complicate the tax system, provide minimal benefit to buyers, and possibly add to property inflation.

The Association of Tax Technicians said the relief was unavailable to home-owners made homeless "through war, natural disaster or other circumstances".

It said: “A refugee who has previously owned a home outside Scotland which they have had to leave, either as it is no longer habitable, or... is no longer safe for them to reside in... would not be entitled to the relief on their first purchase in Scotland.”

The Institute of Chartered Accountants in Scotland (ICAS) said it “questions the need for this relief”, and said it “may well simply increase the price of a first-time purchase by up to £600.”

ICAS said there could be “compliance problems”, as the scheme is not open to those who own property anywhere else in the world: “It is not clear how this could be policed.”

It also said it appeared “inequitable” that a couple buying a home for the first time together would be excluded if one previously had a share in a property.

It gave the example of someone left without any property after a divorce who was trying to buy a new property with a new partner being disbarred.

LBTT is a self-assessed tax and it is the responsibility of the taxpayer to ensure the information provided on the return and the tax paid is complete and correct.

The Chartered Institute of Taxation said it would “question how effective this relief will be”.

It described the saving as “tiny” relative to the cost of a house, and therefore unlikely to make a difference to people getting on the first rung of the property ladder.

It also said the relief relied on “subjective” criteria, including the buyer’s “intention” to use a new property as their main dwelling, and questioned how that could be assessed.

Like ICAS, the Institute said it would be hard to check if applicants owned other property, and this “could prove particularly burdensome" for overseas property.

On new couples buying for the first-time, it said the rules may be “particularly unfair if one of the buyers is getting divorced and having to dispose of the previous property in order to sort out get divorce”.

A Scottish Government spokesperson said: “All contributions to the consultation on the LBTT first-time buyer relief were carefully considered and a number of changes were made to the details of the relief as a result. The provisions in place regarding prior ownership of property are intended to provide consistency of treatment while minimising complexity."