The controversial government decision to charge VAT on private school fees is fuelling an increase in families looking for properties in Scotland.

According to an analysis of property deals worth more than £1m by property agent, Savills, there were 466 residential transactions reaching seven-figure sums in Scotland in 2024, compared to 454 the year before.

Fife, Stirlingshire, and Perthshire recorded most of the sales, with 61 deals completed, with Elie, Bridge of Allan, and Gleneagles and Dunblane seeing most of the action.

Greater Glasgow recorded 44 sales worth at least £1m, with Dowanhill and the Park District in the city’s West End remaining steady and Bearsden and Lenzie also performing well.

And, in Edinburgh, demand for family homes fuelled a 13% rise in million-pound transactions, with Grange, Morningside and Merchiston the top areas.

Experts say the activity is being driven by the VAT change and demand for well-maintained country homes.

Head of residential sales at Savills, Cameron Ewer, said analysis of the buyer profile showed that 75% of those who acquired million-pound properties already lived in Scotland with others coming from London and the South East, Austria, Australia, the USA, Singapore and Hong Kong.

Buyers from London and the South are considering moving to Scotland to purchase prime properties at lower costs, enabling them to allocate more funds towards private school fees

He added: “The VAT change on private school fees is impacting property buying decisions.

“Buyers from London and the South are considering moving to Scotland to purchase prime properties at lower costs, enabling them to allocate more funds towards private school fees.

“Meanwhile, other families within Scotland are choosing prime properties near high-quality state education over private schooling.

“This trend is reflected in the increase in million-pound sales in key prime hotspots.

“Demand for country houses, particularly in areas such as St Andrews and Gleneagles remains strong, but running costs like maintenance and heating are becoming significant factors in purchases of larger country houses everywhere, even at the top end of the market.”

The shift comes after Chancellor, Rachel Reeves, announced last year that VAT would be charged on private school fees from January 1 this year, with the relief private schools receive on business rates also scrapped from April.

The Independent Schools Council (ISC), which represents most fee-paying schools, voted in favour of suing the Government over the policy last November.

The body will claim the Government’s policy is discriminatory, including against children with special educational needs and disabilities.

And it has instructed leading barrister, Lord Pannick, KC, who represented Boris Johnson during the Partygate inquiry, to fight its case.

Savills predicts price growth in Scotland will continue at healthy levels in the next few years, elevating more properties into the seven-figure category.