In response to the Chancellor's Summer Statement at Westminster, the Cabinet Secretary for Finance, Kate Forbes MSP, has said that the Scottish Government will raise the threshold for Land and Buildings Transaction Tax (LBTT) from £145,000 to £250,000.
It is estimated that this will mean eight in ten homebuyers will pay no LBTT when the threshold change is made and the Scottish Government believe this will mean that people purchasing a property costing more than £250,000 will save £2,100.
In addition, an extra £50m is being added to the First Home Fund, a shared equity scheme providing first time buyers with up to £25,000 to buy a property. This will support an estimated 2,000 first time purchases and increase the total funding to £200m.
The changes will not come in immediately because legislation must be brought forward to implement the new requirements. However, no date has been set for its introduction.
Although this is a welcome development, the delay in implementing this new proposal may lead to transactions stalling as buyers delay in the hope of a tax reduction.
Daryl McIntosh of Propertymark stated “This is a positive move and it will be welcomed by buyers, sellers and agents. However, further detail is needed on the application of the threshold being raised in terms of timescales. The Scottish Government must ensure that the legislative proposals are brought forward as soon as possible in order to sustain activity in the market and ensure the economy gets a post-COVID boost as we move into Phase Three.”
For more information, or any questions on how much LBTT you may have to pay, please contact your local Scottish Property Centre.