With speculation mounting over UK government plans to cut stamp duty, Scottish agency DJ Alexander said such a move should be matched north of the border.

Scotland has a separate purchase tax for home buying and David Alexander, chief executive of DJ Alexander, pointed out that under the current charging system through the land and buildings transaction tax (LBTT), Scots first-time buyers start to pay tax at £175,000, compared to £425,000 for their counterparts in England and Wales. 

Furthermore, first-time buyers in England and Wales pay nothing on a purchase price of £250,000, whereas in Scotland they are liable for £1,500.

For buyers who have already owned a home, Scots start to pay 2% from £145,001 to £250,000, whereas in England there is no stamp duty on the first quarter of a million. 

From £250,000 to £325,000 in Scotland there is a 5% charge, whereas this extends to £925,000 south of the border. In Scotland, all homes face a 10% charge on prices between £325,001 to £750,000.

The result is a much greater charge on buying a home in Scotland than in England. A £500,000 home in Scotland has £23,350 charged in LBTT whereas an identically priced property in England would only be charged at £12,500.

Alexander said: “It is clear that the proposal to reduce stamp duty is politically motivated, but it actually makes sense in addressing a slowing market. England, in particular, has experienced a quite substantial dip in sales volumes over the last year, dropping 42% between July 2022 and June 2023.

“The housing market in Scotland has not been impacted nearly so much, with sales volumes dropping just 4% over the same period, but it is clear that the market is going to face reduced activity and lower prices in the coming months. Therefore, a policy which made it cheaper to buy a home would be welcomed north and south of the border.”

Alexander added that even though Scotland had not been as severely impacted by the interest rate rises and its housing market had remained “quite buoyant”, any change to stamp duty in England and Wales would have to be replicated in Scotland. 

“To ensure there is a fair market it would be inconceivable to have a widening of the tax burden for homebuyers north of the border compared to their English counterparts,” he said.

“I do believe that the homebuyer is often seen as an easy target for taxation by all politicians,” Alexander added. “But, if we are to have a thriving, expanding Scottish economy, then we need to recognise that we must have a housing market that is attractive compared to the rest of the UK.”