In yesterday’s economic statement, chancellor Rishi Sunak announced a temporary holiday on stamp duty on the first £500,000 of all property sales in England and Northern Ireland.

The Chartered Institute of Taxation (CIOT) has revealed that replicating the chancellor’s plans could result in more than 90 per cent of Scottish house sales being tax free.

CIOT said that if the change was introduced in Scotland, someone buying a house at the average Scottish house price of £179,541 would expect to save £690 in Land and Buildings Transaction Tax (LBTT).

Analysis from the Centre for Economics and Business Research has indicated that matching the measure, would save buyers an average of £4,400 and result in an additional 100,000 completions over the next nine months.

In Scotland, buyers pay land and buildings transactions tax (LBTT) on completions worth more than £145,000. The levy ranges from 2% to 12%.

The CIOT said that a cut in LBTT would lower the amount of tax that is collected by the Scottish Government, however, if the UK Government raises less stamp duty than originally forecast, this could increase the amount of money available to Holyrood as a result of lower block grant adjustments.

Jackson Carlaw, leader of the Scottish Conservatives, has urged the Scottish Government to move the LBTT threshold. He said: “This change will not just increase the number of properties bought and sold after months of lockdown. It will provide a boost to all those trades who depend on people moving home, decorating, renovating and generally making choices which keep the wheels turning for small businesses.”

His argument has been echoed throughout the housing sector. Simon Brown, a partner at the property consultancy Galbraith, said: “The property market in Scotland does not exist in a bubble and greater competitiveness in England will have a knock-on effect on transactions here. A reduction in land and buildings transaction tax would boost activity and may actually increase the overall tax take whilst supporting movers and the property sector more generally.”

Struan Douglas, director of Edinburgh-based solicitors and estate agents Purdie & Co, said: “It will be worrying if the chancellor’s generous tax giveaways aimed at one part of the UK is not replicated here to allow the Scottish market to follow suit. A £500,000 starting threshold for the English SDLT might be helpful in boosting property sales in London and the south east, but it will not be helpful here.

“There needs to be a warning of the dangers of allowing the Land and Buildings Transaction Tax (LBTT) to remain at significantly higher levels than the property tax for England and Northern Ireland. The result could be the creation of a two-tier market, which could be damaging to property sales north of the border.”

Mr Douglas said The Edinburgh Conveyancing Forum, which represents around 100 solicitors in the capital, and the Edinburgh Solicitors Property Centre (ESPC) may wish to make representations to the Scottish Government along with other interested parties north of the border.

He added: “The market in Scotland is entirely different from London and the south-east. Houses in Edinburgh, for example, are generally more affordable, compared with average earnings, and there’s a shortage of rental property. In the major cities it can be difficult to secure a rental property. Students, professionals, foreign nationals and those on benefits are all competing for the same available rental lets.”

David Alexander, joint managing director of apropos, said: “The chancellor’s proposed cut to SDLT is a welcome boost to the housing market and will provide an immediate boost in confidence for buyers. Scotland must follow suit if we are to face a level playing field and encourage homebuyers to continue to engage with the market during these difficult economic times.

“The existing tax discrepancy which exists between Scotland and the rest of the UK – where first time buyers in England pay no SDLT on purchases below £300,000 - is problematic at the best of times but, just now, when we are facing uncertain times we need to be sure that the Scottish market is able to compete with its near neighbours on an equal footing. The expected SDLT cut will ensure that those currently thinking of moving house will continue to do so in the coming months providing a much needed immediate boost.”

He added: “While the housing market has been quite buoyant in this initial period following the easing of lockdown it is clear that this mood may not be sustained if we start to experience widespread job losses. Maintaining the momentum of the property market is crucial in the months ahead to reduce the likelihood of a collapse.

“Anything which can be done to sustain the property market will, inevitably, keep it buoyant until a clearer picture emerges of the economic outlook in the coming months and years. It is, therefore, essential that all of the UK countries move at the same pace and with the same tax benefits to encourage growth. It is also important to encourage investors and landlords to continue to buy properties in Scotland, and the rest of the UK, to maintain the private rented sector in the coming years.

“A strong, viable, property market is essential to ensure the economy rebounds in the coming year. Scotland must be able to compete equally across the UK in the future growth of the economy and I hope the Scottish Government responds quickly, and effectively to unify the property tax levies. They must act to ensure Scotland emerges from this period of economic uncertainty as strong as their counterparts in the rest of the UK.”

However, Stewart Mathieson, head of markets at EY in Scotland, highlighted that average house prices in Scotland were much lower than in England. He has argued that raising the threshold would mean a reduced tax intake for the Scottish Government. He said: “The ambition for the temporary stamp duty holiday has the potential to stimulate the housing market and in turn trigger a ripple effect across the economy. We’ll have to wait and see if this tactic is replicated in Scotland and what the fallout might be if it is not.”