LoginSubscribe to Alerts

Tax Change To Help Homebuyers In Scotland 

Posted 10 July 2020 by Keith Osborne

The Scottish government has increased the Land and Buildings Transaction Tax (LBTT) threshold to £250,000...

The Scottish government has taken the step of increasing the threshold at which Land and Buildings Transaction Tax (LBTT) is paid from £145,000 to £250,000.

[THIS ARTICLE HAS BEEN SLIGHTLY AMENDED SINCE THE ANNOUNCEMENT OF THE SCHEME'S STARTING DATE.]

As part of its efforts in helping the economy and property sector recover from the impact of coronavirus, finance secretary Kate Forbes announced the change, which will start on Wednesday 15 July, telling parliament that it means 80% of owner-occupier house buyers will be exempt from the charge. The change excludes the Additional Dwelling Supplement for people buying a second home, and non-residential LBTT for buy-to-let purchases. Someone buying a property costing more than £250,000 will save £2,100.

This move north of the border follows Chancellor Rishi Sunak’s Summer Statement on 8 July in which he announced a major Stamp Duty cut in England and Northern Ireland which will be in place until the end of March 2021.

In addition to the LBTT change, the Scottish government has committed an extra £50 million to the First Home Fund, a shared equity scheme providing first-time buyers with up to £25,000 to buy a property. Increasing the total funding to £200 million, Forbes said this additional funding will support an estimated 2,000 more first-time purchases.

Ms Forbes said: “I have listened to calls to raise the starting threshold for LBTT to help stimulate housing market activity and the economy. Today’s changes will benefit house buyers and are focused directly on the particular needs of the Scottish economy. To ensure first-time buyers can also benefit, I will provide an additional £50 million this financial year to directly support them to get on the property ladder.”

“With regards to the First Home Fund, this will help those who have been affected by mortgage lenders reducing loan-to-values but we also need to see the scheme extended beyond next March as so many transactions and housing completions have been delayed by the construction shutdown.

“Both of these issues are core elements of the industry recovery plan we are preparing to submit to the Scottish government.”

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “This will not only boost the housing market it will also support the construction industry, both of which are essential to addressing Scotland’s chronic housing shortage.”

Faisal Choudhry, head of Savills Residential Research in Scotland, commented: “This is good news for buyers of Scottish property who will save money in what is likely to be a challenging economy. It is also positive for sellers who will see demand for property rise further. Clearly the move will largely benefit first-time buyers, however there will be a knock-on effect throughout the market which will have a stimulating effect on the economy.”

Kevin Maley, head of residential agency for Strutt & Parker in Scotland, said: “The temporary relief will undoubtedly stimulate the property market, which will in turn help strengthen the economy as we navigate our way out of lockdown. It will encourage more people to put their homes on the market, even beyond the normal seasonal window.”

 

Find retirement homes developments in Scotland
Find affordable homes developments in Scotland
Find luxury homes developments in Scotland

 

Sign up for email alertsGet the latest properties and updates sent directly to your inbox daily, weekly or immediately you are in control.
Subscribe to Alerts
Search news and advice

Click here to see your activities