Scottish Government £100.6m short on LBTT predictions

Official figures released by Revenue Scotland and analysed by the Scottish Property Federation (SPF) have revealed that the Scottish Government’s Land and Building Transaction Tax (LBTT) returns for February 2017 generated the lowest LBTT revenue of any other month in 2016/17.

Analysis of the February 2017 figures by SPF highlighted that returns were £31.9 million, down from £34.2 million in January.

According to the figures released by Revenue Scotland, revenue from residential LBTT increased slightly by £0.3 million to £20.7 million where commercial LBTT decreased to £11.2 million - £2.6 million less compared to January.

The Scottish Government expected to generate £538 million from LBTT this tax year meaning an £121 million increase on the 2015/16 outturn. Targets are still £100.6 million short with just one month left in this tax year.

Additional Dwellings Supplement (ADS) were however up slightly with revenue for February totalling £7.4 million compared to £7.1 million in January. For the year to date £82.7 million has been raised.

David Melhuish, director of the Scottish Property Federation, said: “Revenue for February has been the lowest to date for LBTT which will be extremely disappointing for the Scottish Government. £100.6 million still has to be raised by next month in order to meet the £538 million target set at the beginning of the tax year, a figure we fear will be a struggle.

“This isn’t a great surprise as there has been a much lower level of commercial property sales but the evidence from members also tells us that the higher value residential markets continue to struggle across much of the country, so we continue to call for the 10 per cent tax threshold to be raised from £325,000 to £500,000 in order to support greater numbers of transactions at these levels of the market.. The position for the government would be a lot worse without the new additional homes LBTT tax. Without this additional £82.7 million, the LBTT figures would be even further from its predicted target.”