THE SNP government is facing a £750 million black hole over the current parliament after massively overestimating how much tax it would receive from house sales.

Figures contained in Thursday’s budget documents show ministers have almost halved their forecasts for income from Land and Buildings Transaction Tax (LBTT).

Last year, the government estimated LBTT, the devolved replacement for stamp duty, would raise almost £1.8bn between 2017-18 and 2020-21 from residential sales.

This has now been revised down by £833m to £962m, a drop of 46 per cent.

Income from non-residential property sales has also been revised down by £29m, although income from a supplement on second home sales is predicted to rise by £110m.

The net change is a £752m drop in anticipated revenue.

The Tories blamed excessive LBTT rates for depressing sales.

There is no LBTT charge for the first £145,000 of a house purchase, but it is levied at 2 per cent between £145,000 and £250,000, then 5 per cent between £250,000 and £325,000, then 10 per cent between £325,000 and £750,000, and at 12 per cent above £750,000.

In its independent report on the 2017-18 draft budget, the Scottish Fiscal Commission, the watchdog which scrutinises the forecasts, confirmed the significant drop.

It said a key factor was lower than expected sales in the £325,000 to £750,000 bracket, which generate 60 per cent of all residential LBTT.

However this was partly explained by a plunge in the volume and price of sales in the North East because of lay-offs in the oil industry.

The Commission said the slump in sales in and around Aberdeen appeared to account for “a significant portion” of the projected £74m in shortfall for the current financial year.

It also said the Scottish Government had “increased the sophistication” of its forecasts since last year which factored in how people had reacted to the start of LBTT in April 2015.

Tory MSP Dean Lockhart said: “The SNP was well-warned by ourselves and those in the housing market that there were problems with its stamp duty plans. It was clear that by setting the rates this high it could lead to a slowdown, and as a result tax revenues would decline.

“The SNP totally ignored these warnings however, and these latest figures from the budget prove that the housing market in some parts of the country is starting to stagnate.

“House buyers and taxpayer are losing out as a result of the SNP’s flawed LBTT plans.”

Labour’s Jackie Baillie added: "This goes right to the heart of the SNP's competence.

“The SNP was warned time and time again by opposition parties and independent experts that its projections were wrong, but stubbornly refused to listen.

"With new powers coming to Scotland the public need to have confidence they'll be used correctly, transparently and competently.”

A Scottish Government spokeswoman said: "The revised forecasts reflect movements in observed trends in the housing market, not only in Scotland but across the UK. They also have to be seen in context. LBTT is forecast to raise more than £2.2bn over the period to 2020-21, of which the residential element will raise more than £1.2 billion. The housing market is sensitive to economic conditions and that is what we are seeing here.

“This government’s Land and Building Transaction Tax will ensure that in excess of 90 per cent of people buying a property between £125,000 and £145,000 pay no tax or less tax than under the previous Stamp Duty Tax, and will take up to an estimated further 10,000 house purchases out of tax next year alone.”