Want a nice house in Scotland? The SNP wants it to cost you

The SNP's new stamp duty equivalent for Scotland, appears to have been designed to send a clear message to the well off in Scotland – expect devolution to mean you pay more tax.

The SNP's new stamp duty equivalent for Scotland, the Land and Buildings Transaction Tax (LBTT), appears to have been designed to send a clear message to the well off in Scotland expect devolution to mean you pay more tax.

The revisions to the tax made yesterday didn't do much to water down that message. In response to the UK government's stamp duty changes in December, the SNP clearly felt they had gone a tad too far with the tax and, as I note in this post, they introduced a new 5% rate and shifted the level the 10% comes in to a higher level.

However, at the same time just to make it clear that it is the "rich" they are after, they cut the rate at which the 12% rate kicks in from £1m to £750,000.

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Up to £145,0000%Up to £125,0000%
£145,000.01 - £250,0002%£125,000.01 - £250,0002%
£250,000.01 - £325,000:5%£250,000.01 - £925,0005%
£325,000.01 - £750,00010%£925,000.01 - £1,500,00010%
£750,001+12%£1,500,000.01+12%

How does that affect home buyers? The chart below, from estate agent Rettie & Co, sums it up.

150122-blog

Buy a house for £900,000 and you will pay 90% more in tax in Scotland than you would in the rest of the UK. The second chart tells the same story.

150122-blog

Not the kind of thing that seems likely to encourage wealth creators to head for Aberdeen or Edinburgh.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.