NAEA calls for Stamp Duty reform
On Tuesday the Scottish Parliament passed a Bill introducing the new Land and Building Transactions Tax, which replaced Stamp Duty with a progressive tax structure more closely related to the value of a property.
The Bill follows limited tax bearing powers that were given to Scotland as part of the Scotland Act 2012, and is the first tax Bill to be passed in Scotland since 1705.
The Scottish Parliament agreed to the principles of the Bill in April, and Parliamentary scrutiny continued during May and June. The passing of the Bill on June 25 represented the third and final stage of the Bill’s passage.
Scotland’s Finance Secretary John Swinney, who introduced the Bill into Parliament, described the move as an “innovative approach to taxation that is much better aligned with the Scottish market, with Scots law and practices, and the principle of progressive taxation.”
He claimed that the legislation would also be more efficient and less costly than the UK government’s approach.
Mark Hayward, managing director of the NAEA, has now called on the government to look to implement a similar system in the rest of the UK.
Hayward said: “On Tuesday the Scottish Parliament passed the Land and Building Transactions Tax Bill, replacing Stamp Duty.
“The NAEA would welcome similar reform in England and Wales. The government needs to modernise the duty to move away from the current ‘slab’ structure to create a fairer, more logical system.
Hayward said the current ‘slab structure’ of Stamp Duty distorts the UK housing market and places a disproportionate burden on first-time buyers.
He said: “It should also be acknowledged that the threshold that the Scottish government is proposing of £180,000 could result in an unfair burden on those purchasing houses at the higher end of the market – for example a purchaser of a property at £400,000 will currently pay tax of £12,000 but under new propositions it will rise to £16,200.
“Property taxes in the UK are amongst the highest in the world and many individuals and families are discouraged from moving home because of this.
“Home owners often end up finding alternative methods to increase living space such as carrying out extensions rather than moving to larger homes.”