The new tax system has stirred the real estate market of Scotland

The growth in demand for luxury property in Scotland between September and December 2014 was provided at the end of 2014 as the price increases, and sales growth.

The latest data from Knight Frank suggests that prices in a large country house in Scotland rose by 1% in Q4 2014. After two quarters, when prices have not changed at all, the price increase in 2014 amounted to about 2.1%. While in 2013 the price growth amounted to 1.6%.

Index Knight Frank has clearly demonstrated that the price increase occurred on the background of the customers ‘ confidence in the outcome of the referendum that took place in Scotland in September 2014, following which it was announced that a new Tax on the Sale of Land and Buildings in Scotland (LBTT) will replace Stamp duty in April 2015.

After the new LBTT rates were announced in October 2014, it became clear that buyers in the upper sector of the market will pay more after the entry into force of the new rules and many buyers rushed to make a deal.

With the introduction of new rules for LBTT all sales of real estate and land is more expensive £254000 pounds will be subject to higher rates of tax than the current UK, from December 2014, the scale of Stamp duty. (What “Stamp duty”)

For more expensive properties, which is represented on the elite real estate market of Scotland, the cost of the tax even more expensive.

The number of potential buyers registered in the market of elite real estate of Scotland in the 4th quarter of 2014 , there were 18% more than in the same period of 2013.

Scottish property market was in a difficult situation. Buyers and sellers had only 6 months to experience the experience of three different systems of taxation.

The benefit is not to postpone the deal with expensive real estate is more than obvious. Thus, a buyer of residential property valued at £900,000 pounds will pay on the current scale Stamp duty only £35,000. With the entry of the new law and implementation in April 2015, LBTT , the cost of taxes to be payable by the buyer will be 92% higher – £67300 pounds.

It is assumed that in the first three months of 2015 the processes of purchase and sale on the real estate market of Scotland will go more actively, as buyers will rush to make a deal before the introduction of the new rules, in order to obtain significant savings on taxes.

® Alice Morgan. 05.01.2015 G.

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