‘Very Shocked’

Savills Research said the change would increase the tax on a 363,000-pound Edinburgh average family home to 13,600 pounds, or 25 percent. Taxes on a home valued at 450,000 pounds would increase by 65 percent.

“We were all very shocked,” Ben Fox, an associate director for Edinburgh at Savills, said about the rates. “These were much more aggressive than we certainly had anticipated.”

Scotland is imposing the tax after the Bank of England moved to restrain soaring home prices in the U.K., primarily in London, where values have climbed more than 50 percent in five years. The BOE placed limits on mortgages worth more than 4.5 times a borrower’s annual income and required lenders to reject loans for buyers who fail a stress test that assumes an immediate 3 percentage-point increase in the benchmark interest rate.

The standard variable rate in the U.K. was 4.45 percent on Sept. 30, up from 4.35 percent a year earlier, according to the BOE. The yield on 10-year government bonds was 2.20 percent today, down from 2.63 percent a year ago.

Mortgage Lending

Mortgage lending has been growing in Scotland this year. U.K. lenders granted 28,600 home loans in Scotland in the first half of this year, an increase from 23,800 in the first two quarters of 2013, according to data from the Council of Mortgage Lenders. That’s down from 104,900 in all of 2006, before the global financial crisis the following year.

The housing levy was authored by the SNP-controlled government. The party won a landslide victory in the 2011 parliamentary elections that paved the way for the vote on its flagship policy of independence. The parliament had been re- established in Edinburgh in 1999 after being disbanded in 1707 with the Act of Union that formed the U.K.

The semi-autonomous government has power over health, transportation and education, while most taxation, along with foreign policy and social welfare, is controlled from London. The U.K., in a bid to appease nationalists, gave Edinburgh authority over some tax policy, such as housing, two years ago.

In the referendum for independence, 55 percent of Scots opted to remain part of the U.K. as Prime Minister David Cameron and the main U.K. political parties pledged to cede more power to Scotland, including over personal income tax.