The property tax take in Scotland has shot up by 18% and David Alexander (pictured) of one of the country’s biggest estate agencies, DJ Alexander Ltd, is warning that it is hitting all areas of the housing market and will deter investment.

Analysis carried out by the company reveals there has been a £102.8m rise from the £583.7m raised the previous year to £686.5m.

Alexander comments: “Scottish homebuyers are now contributing over £13m a week to the Scottish Government through property taxes. The LBTT (Land and Buildings Transaction Tax) income from the last 12 months equates to £13.2m every seven days with the bulk of this tax falling on people buying properties valued at over £325,001 which is where the 10% rate begins in Scotland.”

Not targeted at rich

“The usual explanation is that those with the broadest shoulders should pay the greatest amount but clearly these taxes are targeting many Scots who would not regard themselves as rich.

“Yet those earning an annual income of just under £29,000 and living in a property worth just over £325,000 are defined as the Scots with the broadest shoulders. Given that the average income in Scotland is £38,000 this means that it is ordinary people who are regarded as appropriate targets for higher taxation.”

Alexander adds: “It is highly unlikely that these people will believe they are wealthy. This is the income of plumbers, chefs, sales managers, senior drivers, and administrators. An even higher tax band impacts on nurses, teachers, and police officers.

The danger is that these additional taxes will simply be swallowed up by growing general expenditure.”

“The danger is that these additional taxes will simply be swallowed up by growing general expenditure with taxpayers unable to see why they are being asked to pay more in Scotland. I think most homebuyers would prefer to see these taxes targeted at addressing the housing emergency.”

“Yet these figures are also a sign of just how resilient and lively the Scottish property market is. It is positively booming with prices rising at a higher rate than normal. These taxes do not – as yet – seem to be deterring homebuyers. Of course, this may not always be the case, and the long-term outlook might not be as positive but in the short term the Scottish property market remains very lively.”

Alexander concludes that although the Scottish property market is ‘positively booming,’ it is not yet clear what the long-term impact of such high taxes on homes and employment will be and warns it could deter individuals and companies from investing in Scotland.