The Scottish Property Federation has warned MSPs that increasing the land and buildings transactions tax could make the market less appealing to investors.
Giving evidence at the Scottish parliament’s finance committee on LBTT rates and thresholds, SPF chairman John Hamilton warned of the dangers of increasing the higher-rate commercial LBTT to 4.5% compared with 4% for UK stamp duty and land tax.
The point at which the LBTT rate exceeds that of SDLT for commercial property is £2m.
Recent figures from the Registers of Scotland show that by value some 75% of commercial transactions in the third quarter of 2014 were for values of £2m or more, representing £722m out of total commercial property sales of £962m in Scotland over the period.
Hamilton said: “We feel we are missing an opportunity to make Scotland a competitive place to invest and that the Scottish government’s proposals need some adjustment if we are to avoid any negative perceptions of LBTT by potential investors in the Scottish property market across both its residential and commercial investment sectors.”
