NICOLA Sturgeon has given a strong hint that she will not bow to pressure from the Scottish Conservatives to axe Scotland’s stamp duty equivalent for first-time buyers on homes worth up to £300,000.

Ruth Davidson has urged the First Minister to implement the policy north of the Border, but experts have warned it will backfire, inflating house prices and making it even harder for young people to enter the property market.

Sturgeon commented after being urged by Scottish Greens co-convener Patrick Harvie not to copy the approach of the UK Government.

She said the Scottish Government’s land and buildings transaction tax (LBTT) – the stamp duty equivalent in Scotland – was already “much more generous” to first-time buyers. In Scotland, 65 per cent of first-time buyers are completely exempt from LBTT, 80 per cent already pay either no tax at all or less than £600 in LBTT, and 100 per cent of first-time buyers who buy at or below the average Scottish house price are already exempt from the tax.

However, the First Minister said she would consider whether to give any further assistance to first-time buyers in the Scottish Government’s Budget next month, taking into account lower house prices in Scotland and the Office for Budget Responsibility’s (OBR) assessment, which predicted that the UK change would push up house prices.

Sturgeon said: “Two points will be very much part of our consideration. First, house prices in Scotland are lower than those in the rest of the UK. For example, a house that costs £300,000 in the rest of the UK would cost around £175,000 in Scotland. Secondly, we will, of course, be very mindful of the point that Patrick Harvie has made.

“Yesterday, the Office for Budget Responsibility said that, in its view, the policy announced by the Chancellor will push up house prices and result in first-time buyers paying more for their houses than they would have paid without the policy.

“Even with the voodoo economics that we get from the Tories, I do not think that that makes much sense.”

Harvie, who the Scottish Government may have to rely on to get its Budget passed, responded: “Throwing tax cuts into a dysfunctional housing market solves nothing.”

The OBR said on Wednesday that “the consequence of introducing the relief will be to increase house prices”. It said the reduction in tax costs will feed through into house prices “relatively quickly” as “the relief frees up first-time buyers’ savings to put towards higher deposits”.

A similar, temporary relief from stamp duty was introduced to support the housing market in the wake of the financial crisis, which served to drive up prices.

The OBR said it expected the new permanent relief to have twice the impact on prices, as it will also benefit future first-time buyers, and that property owners would be the biggest winners.