DJ Alexander: Scottish property tax take rises over 65% in three years

DJ Alexander: Scottish property tax take rises over 65% in three years

David Alexander

The Scottish Government’s income from homeowners has risen over 65% in the last three years according to analysis of the latest figures by property firm DJ Alexander Ltd.

The firm found that the latest Land and Buildings Transaction Tax (LBTT) data reveals that the Scottish Government has seen its revenue increase by 66.2% since May 2019.

The revenue generated from the tax (which is charged at a substantially higher rate in Scotland for any residential property purchase over £250,000 and is charged at a lower level for first time buyers than England and Wales) rose from £365.6m in the year to May 2019 to £607.5m in the latest figures to May 2022.

Within this overall figure the percentage of tax paid by landlords, property investors, and second homeowners has risen by 70.3% over the same period increasing from £98.1m in May 2019 to £167.1m in May 2022.

David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “These figures highlight just how substantially homeowners, landlords, and second homeowners now contribute to the Scottish Governments’ coffers. The LBTT is a major earner for the Government and increasingly those who have to pay the additional dwelling supplement are providing a greater percentage of the overall tax take.”

“There is little doubt that the property market has been booming over the last few years and this has provided invaluable income for the Scottish Government during the difficult period of the pandemic. Their own forecast is for LBTT revenues to be maintained at a similar level over the next five years and continue to increase, albeit at a slower rate. Whether this income remains as high could be in doubt if the Scottish Government continue to negatively target landlords and investors in Scotland.”

Mr Alexander concluded: “The property market is undoubtedly a cornerstone of the Scottish economy, and these revenue figures highlight just how much tax is being provided by homeowners and investors. But the market is fragile, and we are seeing signs of a softening of prices and a lessening of demand as interest rates rise, the cost-of-living crisis continues, and utility and fuel bills soar. It will be interesting to see where these figures are a year from now.”

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