From April 1, 2015, Land and Building Transaction Tax (LBTT) will replace Stamp Duty Land Tax (SDLT) on Scottish property transactions. Though it is 2 per cent lower than had been feared, it is still 27 per cent higher than the SDLT paid by the rest of the UK.

LBTT is good news for home ownership generally because it means that 50 per cent of buyers won't have to pay property tax at all. However, it does mean that the already heavily taxed middle classes will be picking up the tab and that could impact the higher end of the market.

High levels of property tax are normally associated with booming markets, but the Scottish property market, though improving, is still fragile.

The new system relies on 8 per cent of buyers for around 75 per cent of the tax revenue. If there is any slow down at this level it will result in a substantial fall in revenue. It seems inevitable that the threshold for the 5 per cent tax band will have to be extended in line with the rest of the UK.

Outside London, Scotland is the most searched for location on Savills international website and, despite higher levels of tax, it still offers excellent value compared with London and the south.

For example, around £775,000 will buy a two-bedroom upstairs flat in Fulham, including SDLT. The same outlay will buy a four-bedroom Victorian villa with gardens in a comparable Edinburgh suburb, including LBTT. A bargain in anyone's book.

Further information

View available properties for sale in Scotland.