Scotland must encourage more investors into its property market as a way of supporting its economy once the Coronavirus recedes according to a leading property management firm.
The firm – operating as DJ Alexander in Scotland and apropos in the form of its UK-wide property management platform – believes that by supporting and encouraging investment in the residential property market the Scottish Government would shore up a cornerstone of their economy.
David Alexander, joint managing director, says: “Clearly there is going to be a downturn in the Scottish and UK economies in the coming months.
“The uncertainty of the coming six months is causing havoc in all parts of the economy and the residential housing market is particularly susceptible to fluctuations in mood. The Scottish property sector, with its higher taxation on first time buyers, second-home owners, landlords and property investors already makes it a less attractive prospect than its counterparts south of the Border.
“First time buyers in England under normal circumstances pay no stamp duty on the first £300,00 whereas in Scotland the tax starts at £145,000.”
Alexander says that to make Scotland a more appealing destination for investors the Holyrood government should, at the very least, unify the rates and thresholds for land and buildings transaction tax with its English equivalent, the stamp duty land tax.
“Although the LBTT threshold has already been raised due to the pandemic until the end of March it has not matched the offer in England so remains substantially higher for property investors, second homeowners, landlords and first-time buyers” he claims.
“Scottish Government ministers privately concede that they could raise higher revenues by reducing the rates and threshold of LBTT, but they choose not to for the sake of political expediency.
“However, in these times when the Scottish Government needs all of the funds it can get to cope with the economic fallout from the pandemic it must make sense to choose higher revenues over political point scoring.
“From next April I would urge the Scottish Government to ensure we have a level playing field in property taxations with our English counterparts. We must do all we can to encourage property investors, landlords, second homeowners, and first-time buyers to look at Scotland as an equal market in terms of taxation with England and Wales. If it is not, then many potential homebuyers, investors and landlords will look elsewhere.”
This post has originally been featured in Letting Agent Today.