ESPC has known as on the Scottish authorities to overview the Land and Buildings Transaction Tax (LBTT) threshold for first-time patrons, arguing that the present degree now not displays market circumstances and is proscribing entry to dwelling possession in higher-demand areas.
A survey of ESPC members discovered widespread concern that the £175,000 LBTT reduction threshold is out of step with present property costs, notably in Edinburgh, East Lothian and Midlothian. In Edinburgh, the place the typical first-time purchaser dwelling now prices £253,424, patrons face an LBTT invoice of £1,671 — solely round £600 lower than that paid by non-first-time patrons.
In line with Registers of Scotland knowledge, there was a 262% lower in properties offered throughout the tax-free Band 0 bracket throughout Edinburgh, the Lothians, Fife and the Scottish Borders since LBTT was launched in 2015. In Edinburgh alone, simply 5% of properties offered in 2024 certified for Band 0, down from 32% in 2015.
ESPC is looking for a zonal pricing mannequin for first-time purchaser reduction—one which accounts for regional disparities in common property values. It’s calling for Edinburgh’s threshold to extend to £250,000, with tailor-made will increase in different high-cost areas like East Lothian, and Midlothian. Different areas may face up to the edge remaining at £175,000.
Paul Hilton, chief government of ESPC stated: “The present LBTT threshold is solely not aligned with the market. First-time patrons are already stretched to cowl deposits and authorized prices. This extra tax burden is now making dwelling possession much more inaccessible.
“Introducing a zonal pricing mannequin primarily based on regional disparities of property costs is a sensible, evidence-based proposal that displays the variety of Scotland’s housing market. A one-size-fits-all method is now not match for objective.”
Hilton continued: “With Scotland within the midst of a nationwide housing emergency, the necessity for focused coverage intervention has by no means been extra pressing. We communicate on behalf of all our members in urging policymakers to modernise the LBTT system as a matter of precedence, beginning with rapid revisions to the first-time purchaser threshold.”
