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Scottish property tax could punish first time buyers, says academic

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  • 21/11/2014
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The Scottish government's incoming property purchase tax, the Land and Buildings Transaction Tax (LBTT) is a really “bad idea”, said the first academic to speak out on the replacement for Stamp Duty.

That is the view of Professor Ben Jacobson, chair in financial markets at the University of Edinburgh Business school, writing in the Daily Telegraph.

Jacobson warned that the policy could be detrimental to those trying to get a foot on the property ladder.

The new property tax means that those at the top end of the market will have to pay a much higher levy than under the old Stamp Duty. Those increases will be balanced by a cut in the amount payable on smaller properties which John Swinney, the Scottish Finance Minister says will be fairer and help first time buyers.

Jacobsen, however feels that the new tax will make it harder for those at the top end of the market to sell their homes, creating increased demand at the bottom end, resulting in rising prices.

He said: “On the surface it looks like a smart and fair plan. Unfortunately this tax is grounded in an old-fashioned socialist model most Left-wing parties in other countries put aside a long time ago. And the reason is that life is never just that simple.”

Plans for the new property purchase tax in Scotland were first announced in October. It will be applied from 1st April 2015 and will result in those with a £250,000 property charged a 10% levy for selling. Those with a £1m home will be charged 12%.

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