One in five would-be homeowners is being put off buying because of the "unfair" Stamp Duty replacement, according to a law firm.
The study found 38 per cent of those who had thought about getting a foot on the property ladder had backed off since the Land and Buildings Transaction Tax (LBTT) began two years ago.
More than half (53 per cent) said the levy - which saw a 10 per cent tax on purchases of homes costing more than £325,000, but less than £750,000 - was a factor.
Among the 1,062 people who took part in McEwan Fraser Legal's email survey, 38 per cent claimed LBTT was the deciding factor.
And 68 per cent said they did not think it was a fair tax.
Last week, it emerged a new generation of 'sit tighters' had fuelled the biggest house prices rise in Scotland in 30 months.
Many would-be buyers who cannot afford to move up the ladder are holding off putting their own homes for sale.
Ken McEwan, Chief Executive of McEwan Fraser Legal, urged the Scottish Government, which introduced the levy, to consider the detrimental impact the tax is having on the market.
He suggested public coffers are losing out in the form of reduced tax receipts from sales.
Mr McEwan said: “If stagnation happens at any part of the housing market, it has a knock on effect all the way back to first-time buyer properties – precisely those the tax was intended to help,” he said.
“Ministers appear oblivious to the serious problems they have created. The housing market faces a serious slowdown if measures are not taken quickly and I hope they take notice of our survey.”
The LBTT imposes a two per cent levy on residential properties of worth more than £145,000. The sliding scale goes up to 12 per cent on those which sell for more than £750,000.
Would be potential landlords, who are being charged an additional three per cent charge under second home levy, are also less inclined to buy.
Last month The Royal Institution of Chartered Surveyors said the property market in Scotland was ‘stagnant’ as a result of the tax, with a fall in the number of new instructions.
The Scottish Property Federation (SPF) has calculated that revenues generated by the LBTT in the past year are £57 million down on Scottish Government forecasts because of fewer sales.
Meanwhile, estate agents Savills said the LBTT was curtailing the million pound market in Scotland, according to latest research from Savills.
Its new analysis has found the market is now less concentrated in Edinburgh and the Aberdeen area, with more activity spreading out to the west and other regional locations.
While Edinburgh remains the hub of the million pound market, the capital has seen a drop in transactions at this level, with 33 such sales recorded in the first six months of 2017 compared to 45 last year.
In addition, at the height of Aberdeen’s oil-dependent residential market, the area generated the second highest level of transactions after Edinburgh. However, there were only five million pound transactions during the year ending June 2017, including just one in 2017, in a period characterised by uncertainty in the energy sector.
The Government has pointed out that since the LBTT came into force, 93 per cent of taxpayers had paid either less tax compared to Stamp Duty or no tax at all. It is monitoring the market.
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