THE Scottish Government’s tax take from homeowners has increased by two-thirds in the last three years, as people changed homes and lifestyles during the Covid pandemic.
New data from Revenue Scotland showed the Land and Buildings Transaction Tax (LBTT) raised £607.5million in the year to May, up 66% from £365.6m in the year to May 2019.
The devolved tax is charged at a higher rate than stamp duty in England and Wales for any home purchased over £250,000, but is charged at a lower level for first time buyers.
An analysis by the leading property firm DJ Alexander Ltd also found that there was an even steeper rise in tax raised from landlords, property investors, and second homeowners.
The additional dwelling supplement paid on multiple properties rose 70.3% over the same period increasing, from £98.1m in the year to May 2019 to £167.1m up to May 2022.
David Alexander, the chief executive officer of DJ Alexander Scotland, said: “These figures highlight just how substantially homeowners, landlords, and second homeowners now contribute to the Scottish Government’s coffers.
“The LBTT is a major earner for the Government and increasingly those who have to pay the additional dwelling supplement are providing a greater percentage of the overall tax take.
“There is little doubt that the property market has been booming over the last few years and this has provided invaluable income for the Scottish Government during the difficult period of the pandemic.
“Their own forecast is for LBTT revenues to be maintained at a similar level over the next five years and continue to increase, albeit at a slower rate.
“Whether this income remains as high could be in doubt if the Scottish Government continues to negatively target landlords and investors in Scotland.”
Mr Alexander added: “The property market is undoubtedly a cornerstone of the Scottish economy. But the market is fragile, and we are seeing signs of a softening of prices and a lessening of demand as interest rates rise, the cost-of-living crisis continues, and utility and fuel bills soar. It will be interesting to see where these figures are a year from now.”
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