House sales fell through the floor with the advent of COVID-19... leaving thousands of Scots in lockdown limbo.

The closure of the application record at Registers of Scotland - coupled with government guidance that home movers should delay – has resulted in a huge decrease in sales and in the number of properties coming on the market.

But the clock is also ticking for buyers planning to reclaim Additional Dwelling Supplement – the steep extra tax paid on purchases if your current home has not yet sold.

Revenue Scotland will only consider refunds if you sell your previous main residence within 18 months – and there are currently no plans to extend this despite the lockdown.A Revenue Scotland spokesperson said:

“We are aware of the impact the restrictions put in place as part of the response to the coronavirus has had on taxpayers. We continue to engage with Scottish Government officials as they work with ministers to consider a range of matters relating to the devolved taxes during the COVID-19 pandemic.Any changes on ADS policy will come from government.At present there are no such changes that would come into effect in a short time frame, but we will continue to engage to ensure we are positioned to communicate to agents and taxpayers any forthcoming policy changes relating to devolved taxes.”

ADS is a supplement on purchases of additional residential properties in Scotland, such as buy-to-let and second homes costing £40,000 or more.

Crucially it kicks in if you haven't yet sold your existing main residence, but can usually be reclaimed within 18 months if you do sell.

It's charged at four per cent of the property's purchase price and is in addition to Land and Buildings Transaction Tax (LBTT).

LBTT replaced the old Stamp Duty Land Tax (SDLT) in 2015 and is payable on both residential and non residential land and property transactions above £145,000.

The figures are stark. On a £300,000 property, the LBTT is £4600 and there's a £12,000 ADS bringing the total tax payable to £16,600.

So it's little wonder owners are worried that unless the 18 month window is extended they will be at a huge disadvantage when it comes to reclaiming the ADS.

Worse still, as we enter the sixth week of lockdown, stay-at-home guidance means people are unable to attend property viewings in person or have valuations carried out.

A report by global estate agent Knight Frank predicts that house sales across the UK will decline by 38 per cent this year.A spokesman said:

“We expect more than 500,000 lost sales in 2020, which will have ramifications for the wider economy given the multiplier effect that moving house has.Of the nearly 526,000 sales we expect to be “lost” this year, fewer than half will be carried into 2021.For the government to see a full recovery of the market, with all of these “lost” sales carried forward, there will be a need for substantial incentives to ease market liquidity - including a reform to stamp duty.”

The picture in Scotland is equally bleak. Paul Hilton, chief executive of ESPC, the country's largest property marketing company said:

“Coronavirus has had a significant impact in terms of sales volume and the number of homes coming to market.From mid-end March onwards, there has been a marked decrease.This is to be expected with the current social distancing measures in place and the advice of the Scottish Government to delay moving home until after these are lifted.”

There is some positive news, however. From today Registers of Scotland opens a new digital submission service to Land Register applications.

But the application record is not fully open and RoS says this will only happen when the Keeper is confident it is the right time to do so, in consultation with the Law Society of Scotland.

Likewise, Revenue Scotland has announced some temporary operational changes to the way returns and reclaims can be made to protect the health and wellbeing of staff.

But the government has yet to address the extension of the 18 month period for disposing of a previous main residence in light of coronavirus.

The operational changes mean that from May 1, paper claims can no longer by accepted by Revenue Scotland.

A new online repayment claim form is to be used by taxpayers and their agents.

The existing Scottish Electronic Tax System (SETS) is available for solicitors making claims on behalf of clients only if they submitted the original LBTT return and if the claim is being made within 12 months of the filing date.

This allows the original return to be amended using SETS.

The Revenue Scotland spokesman added:

“ADS repayment claims being progressed by agents on behalf of taxpayers should continue to be made in the usual manner through the SETS system.For taxpayers making the repayment claim for themselves, an online form is being rolled out to replace the current paper form.A dedicated COVID-19 page on the Revenue Scotland website has been created that will provide updates.”

Watch this space.