Scotland tightens rules for wealthy investors purchasing expensive real estate in the country – mostly estates and castles. Land and buildings transaction tax (LBTT) for housing worth over £135,000 will be increased up to 12%, whereas the current stamp duty on housing across the UK reaches its maximum of 7%, and the tax on commercial property of 4%, says the ee24.com with reference to Financial Times.
Tax "on castles and manors" is calculated on a progressive scale. For example, Knight Frank calculations are as follows; when buying property in Scotland for £500,000, one will pay £27,300 to the Government of Edinburgh, that is 82% increase (£15,000) if compared with previous taxes. According to the agency, houses worth over £250,000 brought 3/4 of all stamp duty in Scotland, which last year amounted to £215 million.
The new tax will be levied in six months – from April 1, 2015. According to Malcolm Leslie, partner in Strutt & Parker’s Edinburgh office, a window was given to the real estate market in Scotland to complete large transactions, which are expected to be finished in the autumn and winter of 2014-2015, as the Scots said "no" to Scottish independence from Great Britain in a referendum of September 2014.
According to Matthew Gray, from the National Association of Estate Agents, the new Scottish tax is contrary to the UK’s strategy and will negatively impact on the demand for expensive housing and especially for commercial real estate in Scotland, increased after the referendum.