The country's property market has gained a spring in its step with prices rising at their fastest rate since the 2007 housing boom as high-end buyers completed purchases to beat new tax rates.
New data for February shows that a rush to complete property transactions before the arrival of the Scottish Government's Land and Business Transaction Tax (LBTT) helped the average house price north of the border rise 1.7 per cent to a new record high of £169,742.
According to the Your Move/Acadata House Price Index, house prices are up by 6 per cent compared to last year, the strongest rise since August 2010.
From the start of the month, house buyers in Scotland have been 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 carry a 12 per cent duty.
Fifteen properties priced at £1 million or more were sold in February, compared to six the previous months.
They included one of the outskirts of Edinburgh which sold for just under £3.7 million, the most expensive house to be purchased in Scotland since July 2011.
Christine Campbell, regional managing director of Your Move, said: "Tactical tax considerations have helped foster price growth in the Scottish housing market and are likely to play a significant role in the months to come too.
"Now that the LBTT has come into force, we expect to see a temporary drop-off in the number of properties sold above £750,000, now liable for the top rate of tax - similar to the impact we're currently seeing in London among £2 million properties in light of December's stamp duty changes.
"Typically in the housing market cycle, we would expect home sales to ease back in February, in the aftermath of the costly Christmas period.
"This February moved against the seasonal grain, with completed home sales up 14per cent on January levels - however, activity is still 4per cent down on last year."
John Tindale, senior housing analyst for housing experts Acadata, agreed that the rapid rise in prices in February was tax related.
He said: "In February 2015 there were 15 properties sold in excess of £1 million, which compares to only 6 in January 2015 or an average of 11.6 properties per month in 2014.
"Thus, we can conclude that February's 'average' house price has been somewhat artificially inflated by tax timing considerations, as opposed to underlying changes in the state of the housing market.
"A similar sentiment is likely to apply to the March and April figures when published, with March seeing further increases in average prices, while an expected lack of high-value properties changing hands in April is likely to cause prices to fall."
He anticipates a "considerable reduction" in the number of properties selling for more than £750,000, the threshold level for the top rate of tax, for the rest of the year.
On an annual basis, house prices rose in 28 of the 32 local authority areas, with Argyll and Bute experiencing a 17.4per cent increase, the highest on the mainland.
The Shetland Islands saw the highest yearly rise in Scotland, with a 26.9per cent increase.
Aberdeenshire, the Shetland Islands, Edinburgh City, Aberdeen City, East Lothian and Angus all experienced peak prices in February.
Edinburgh topped the table with an average house price of £248,791, the report found, while Glasgow's average house price was said to be £137,133, an increase of 3.7 per cent compared to last year.
Faisal Choudhry Associate Director and head of Scottish Research at Savills said: "Generally, this is similar to our own figures, and we are predicting house price growth of 4.5 per cent across Scotland this year, which will be higher than that of the UK.
"This is not just because of the impact of LBTT, but because of the stronger economic conditions, low inflation and low interest rates that are currently in place."
PLEASE XREF SCOTLAND'S HOMES SUPPLEMENT
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article