Throughout the ongoing constitutional debate in Scotland we have been warned of the danger associated with a “race to the bottom”. This is a socio-economic phenomenon in which competing governments cut taxes in order to attract or retain economic activity or win votes in their jurisdictions with the result of disadvantaging the poorest in society.
Late last year the Scottish Government announced the LBTT would replace Stamp Duty and that it would make it easier to buy properties up to £325,000 in value. Soon afterwards the UK Government undercut the Scottish Government with changes to Stamp Duty – making it even cheaper to buy a £325,000 house. The report in the Herald today explains that the latest round of one-upmanship involves the Scottish Government spending a further £60m on cutting LBTT. The race to the bottom has come to Scotland.
Scotland’s 50,000 homeless and the further 50,000 living in overcrowded accommodation must be reassured that the tax payable on purchasing a £325,000 home has dropping so rapidly!