JOHN Swinney has hit property millionaires with a new tax taking more cash from sales of the most expensive homes.

In his budget statement, he revealed the new Land and Buildings Transaction tax to replace Stamp Duty on house sales.

It almost doubles the tax on a £1million home.

Mr Swinney said the new system will benefit those buying at the lower end of the scale and ensure those who can afford it pay more.

The deal will see no tax paid on sales up to £135,000 taking the zero tax threshold up from the £125,000 ­under Stamp Duty.

Three bands are introduced, costing 2% up to £250,000, 10% up to £1m and 12% for sales over £1m.

Mr Swinney said the tax was based on ability to pay.

He said: "The old Stamp Duty was outdated, causing unfair tax hikes at set property prices. This led to the market being distorted and led people to try to avoid tax.

"The increase in the level before paying tax will also benefit around 5000 house buyers a year, helping first time buyers and improving the affordability of starter homes."

He said 90% of buyers will either pay the same or be better off. Those hit hardest will be people ­buying a £1m home costing more than £77,000 in tax. Under Stamp Duty the sale of a £1m house would cost £40,000 at the 4% rate.

The big difference, which helps buyers of homes ­between the zero threshold up to around £325,000, is the different rates apply to each portion of the price and not a set percentage rate of the whole price.

Examples are a house at £140,000 will now cost £100 tax compared to £1400 of Stamp Duty. A £260,000 home will cost £3300 compared to £7800.

Mr Swinney said he would continue to tackle inequalities with his eighth budget.

He said they would spend more than £390m for 6000 affordable homes, 4000 for rent and an extra £125m for the housing sector and an extra £288m for health.

More than £300m to ­extend childcare for three and four year olds.

He allocated £81m to mitigate the 'bedroom tax', continue with free prescriptions and over 60s travel.

Deputy First Minister Nicola Sturgeon said: "We want to support our most vulnerable, encourage ­people into the workplace and work towards making Scotland a more equal country to live and work.

"We want to break generational cycles of poverty to ensure Scotland is one of the best countries in the world for children to grow up."

Labour said Mr Swiney had let down the NHS and he was not increasing spending on the health budget.

The Tories were not satisfied with the charges at the top end of the new tax scale.

Finance spokesman Gavin Brown said: "The 10% is difficult to justify."

Housing charity Shelter welcomed the new property tax but was disappointed by the ambition of the house building programme.

Director Graeme Brown said: "While £125million of additional funds is welcome, the commitment to deliver only 4000 social rented homes is a missed opportunity and shows the Scottish Government's ­ambition falls well short of meeting the expectations of 150,500 people stuck on council house waiting lists.

"To bring real hope to these families and individuals, we need to deliver at least 10,000 social rented homes a year."

stewart.paterson@ eveningtimes.co.uk