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Tax on buying property in Scotland reaches new ATH

The tax on buying property in Scotland has reached a new record in the latest statistics, according to an analysis by a leading property firm. DJ Alexander Ltd, which is the largest lettings and estate agency in Scotland and is part of the Lomond Group, said that Scottish Government revenues from Land and Buildings Transaction Tax (LBTT) increased by 11.5% between September and October, rising £7.2m to a new record total of £69.6m.

Between November 2021 and October 2022, revenues rose to £634.9m, a 16.3% increase compared to the £545.8m raised in the 12 months to October 2021. The last four months alone have brought in over a quarter of a billion pounds (£259.3m) and are the four highest monthly totals since LBTT was introduced in April 2015.

Last month just 1,910 homebuyers paid 84.3% of all tax (excluding additional dwelling supplement (ADS)), totalling £42.3m out of a total of £50.2m collected. In Scotland, the 10% tax rate begins for all properties sold for £325,001 or more, and each homebuyer over this threshold pays an average of £22,146. For properties sold for more than £750,000, just 130 people paid £96,923 each on average, contributing £12.6m, which is equivalent to over a quarter (25.1%) of all tax raised.

Over a quarter (27.7%) of all revenue raised through the additional dwelling supplement (ADS) was paid by landlords, property investors, and second homeowners, contributing £19.3m during October alone. In the last three months alone – the highest amounts collected since LBTT began -the ADS has raised £54.0m.

David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “The property market continues to be a strong contributor to the Scottish Government’s coffers. This is partly due to the housing boom over the last few years, but it is equally down to the substantially higher rates charged north of the Border.”

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