ESTATE agents have forecast a rush in people buying and selling property during the next two days as they try to seal deals before the replacement for Stamp Duty comes in.
The Land and Business Transaction Tax (LBTT) will replace the charge for house purchases from Wednesday, meaning that many home buyers will no longer pay a purchase tax on their property.
However, for those paying above £350,000, buying a home will be more expensive than under the old tax regime, with the cost increasing sharply as value rises.
Faisal Choudhry Associate Director and head of Scottish Research at Savills, said that he expects to see brisk business today and tomorrow as buyers at the top of the market seek to close transactions before being hit by higher taxes.
He said: "People have been trying to get deals completed before the 1st of April, when the switch over to LBTT comes into force.
"When you get about £350,000 the costs do not rise much. But I know of one person who's facing an increase of £13,000, so they are desperate to have the transaction completed."
From April 1, house buyers in Scotland will be charged 10 per cent duty on properties worth £350,000 to £750,000, compared to 5 per cent paid under stamp duty
Under LBTT, properties worth more than £750,000 will carry a 12 per cent duty - currently reserved to homes selling at more than £1.5m. At the moment, properties changing hands for between £750,000-925,000 cost buyers 5 per cent in stamp duty, while those sold for between £925,001 to £1.5 are charged at 10 per cent.
Movers at the lower end of the market will benefit though, with the starting 2 per cent rung for LBTT moving up to properties worth £145,001 instead of £125,001 now.
Mr Choudhry predicted that the impact of the new tax would take a while to be fully felt, and that the market would go through a period of adjustment.
However, he does not believe that it will bring a halt to the steady growth in house prices or the recovery of the property market from the crash of 2008.
He said: "Eventually the market will get used to the new system and continue to move on. We currently have conditions where there is low inflation, consumer confidence, and a stronger economy and this will keep things moving.
"There will be a period of adjustment, but things will continue to improve."
In Edinburgh, Dr John Boyle, of Rettie and Co, said that sales of prime properties had increased by 200 per cent ahead of the implementation date of LBTT, including the sale of 25 homes valued at more than £1 milliom.
He added: "There's been a big boost to the market as people try and get their houses on before the new tax comes in.
"However, while the new tax may bring about a pause at the very top-end, for the majority of buyers there will be no tax at all, so some will be better off."
HMRC, the Treasury and other UK departments have given the Scottish Government a high level of support in preparing for the new tax as it is devolved to ministers north of the border..
Alistair Carmichael, Secretary of State for Scotland, said: "The Scotland Act 2012 will see a significant transfer of financial powers to Holyrood. The new taxes are being switched off at a UK level and Revenue Scotland and the Scottish Government will now be in charge of administering these taxes for Scotland.
"This is a significant step towards financial accountability for the Scottish Parliament as it will choose where to set the levels of taxation in these areas and see its revenue rise or fall accordingly.
"The UK Government has done all it can to help - it is now over to the Scottish Government to make this run smoothly. It will be a test of their readiness to operate these devolved taxes."
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