SCOTLAND'S new property tax could spark a housing market crash by squeezing sales of luxury homes, leading estate agents have warned.
Property experts said the Land and Buildings Transaction Tax could dramatically reduce sales of homes worth more than £500,000.
They warned the whole housing market could stagnate as a result - halving the expected revenue from the new tax.
A number of leading agents spoke out following a meeting at Holyrood organised by the Scottish Conservatives, who are calling for cuts to the proposed LBTT.
The new tax replaces stamp duty from April 1.
Finance Secretary John Swinney announced the rates in October but reduced most of them last week after Chancellor George Osborne made sweeping cuts to stamp duty in December.
But despite the U-turn, from April tax on buying homes over £330,000 will be higher in Scotland than in England.
LBTT on a £500,000 home will be £23,350, compared with stamp duty of £15,000, while tax on buying a £1 million property will be £78,350 in Scotland, compared with £43,750 in England.
Estate agents Savills said LBTT will rely on only eight per cent of property transactions at the upper end of the market for 75 per cent of the revenue it is expected to bring in.
Associate director Faisal Choudhry said the higher tax rates would only have to stall a small number of sales for revenue to be severely hit.
He said: "It creates a lot of risk in the residential market in Scotland. The overall revenue could be halved if the market stalls."
Jamie Macnab, Savills director of residential sales, said: "If the top end stalls and goes back to 2009 levels, the shortfall would be catastrophic.
"This could be a market suppressed by tax."
He stressed such a crash would be a "worst case scenario".
However, he said his firm had seen a sharp increase in luxury home sales since October as buyers and sellers sought to avoid the LBTT.
He also said a number of wealthy individuals were looking to sell up and leave Scotland, as they were fearful of Holyrood gaining control over income tax.
Mr Swinney further cut tax on property sales at the lower end of the market last week, when he revised his plans.
He also introduced a five per cent tax band between £250,000 and £325,000, reducing the cost of buying some mid-market homes.
The rate then jumps to 10 per cent on the part of price between £325,000 and £750,000, pushing up tax on more expensive homes.
Overall, LBTT - the first national tax to be raised in Scotland for 300 years - is expected to bring in £235m from residential property sales.
Gavin Brown, finance spokesman for the Scottish Conservatives, said the five per cent band should be extended.
He said: "The changes last week were a step in the right direction but there is still some distance to go.
"Without further change there could be an immediate detrimental impact on a key section of the housing market, which will feed into the economy more widely.
"In addition, there are medium term concerns about the signal it sends more widely about Scotland as a place to do business.
"We are calling on the Scottish Government to review this again and extend significantly the upper threshold of the five per cent band."
A Scottish Government spokeswoman said: "The revised residential LBTT rates and bands ... will mean that no tax will be payable on 50 per cent of house purchases and more than 40,000 home buyers will pay less tax than they would under UK SDLT.
"Our tax decisions have been driven by the principle that taxes should be proportionate to the ability to pay.
"Where we have power to do so, this Government will do all it can to help people enter the housing market, because it is the right thing to do for our economy and our communities."
The spokeswoman added: "Indeed, Savills themselves note that Scotland is the most 'searched for' location on their international website outside London, citing its 'excellent value' compared with London and the south."
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