The Scottish Government’s plan to replace the current “slab” stamp duty structure, which creates inequalities in the level of taxation paid, with a more progressive tax has been welcomed by the Edinburgh Solicitors Property Centre (ESPC).

However, the ESPC, which represents solicitor estate agents in Edinburgh, warned MSPs that the new levy will place a “significant financial burden on families” in Scotland’s capital and other areas with higher than average house prices.

The Bill must have an awareness of regional variations in the property market as currently a difference in property selling price of just £1 can lead to thousands of pounds in additional tax for the buyer, the ESPC said.

As part of the Scotland Act 2012, the Scottish Government will take responsibility for taxes on land transactions from April 2015 when the UK Stamp Duty Land Tax is replaced with the Land and Buildings Transaction Tax.

The ESPC suggested that the rate of tax increases in relation to selling price must be well-balanced in order to allow people to move up and down the property ladder.

Giving evidence on the legislation at Holyrood’s Finance Committee, David Marshall, Business Analyst at ESPC, said: “I don’t think it would be practical to have regional stamp duty – I think that certainly would lead to complexity and would need constant revision.

“I do think however there needs to be awareness of regional markets and the make-up of those when setting stamp duty rates.

“The move away from (the current system) is something that we are very much in favour of, it is just that rate of increase that we need to be careful of to make sure that the differential in tax, for example for someone (buying a property) at £250,000 isn’t massively less than someone at (buying a property) £350,000. If you do see that large disparity then that could create inequalities in the market.”

At present, stamp duty is applied at one per cent for properties costing between £125,000 and £250,000 and three per cent on those sold for £250,000 to £500,000.

In the written submission to the committee, the ESPC said: “Even whilst acknowledging that one of the aims of a progressive system of taxation is to place a greater burden upon those who have the broadest shoulders, it is worth pointing out that households buying a home worth £400,000 aren’t necessarily ‘rich’.”

The group considered the impact of two sets of bandings suggested by the SNP, with the first proposing 7.5 per cent tax is paid on the part of the purchase price that is more than £180,000.

Anyone buying a home worth £400,000 would pay an extra £4,500, the ESPC found.

Another scenario would see no LBTT charged on the part of the purchase price below £125,000, two per cent on the part between £125,000 and £250,000 and 9.5 per cent on anything over £250,000.

The ESPC calculated that anyone paying more than £400,000 would have to find an extra £7,750 in tax; this burden increases to £38,750 for purchases of more than £1 million.

These bandings would raise £76.6 million in the ESPC’s core area, 30 per cent more than stamp duty.

The Scottish Government said the replacement tax would create “a proportional progressive structure, which includes a nil rate band and at least two other bands”.

Under the new system only the proportion of the price above the threshold is liable to the higher rate of tax.

The new legislation is proposed to come into force from April 2015.