Homebuyers in Scotland will be able to take advantage of reduced Land and Buildings Transaction Tax (LBTT) rates from Wednesday July 15, after Scottish finance secretary Kate Forbes announced the new changes.
From this week, the lower threshold at which LBTT has to be paid on purchasing a property has been increased to £250,000 and will remain in place until March 31, 2021*. The latest announcement from the Scottish government follows the changes which the chancellor Rishi Sunak announced to stamp duty in England and Northern Ireland last week.
What are the changes to the LBTT?
The new legislation changes to LBTT will see the lower threshold for which the tax must be paid on property purchases be increased from £145,000 to £250,000. This means any house which is purchased for under the sum of £250,000 will not be subject to paying LBTT.
For houses which cost more than £250,000, no changes have been made to the rates and thresholds which usually apply when purchasing a house**. The LBTT ‘holiday’ is to run from July 15 through until March 31, 2021 and aims to boost the housing market and spark activity amongst buyers.
Commenting on her announcement, Ms Forbes said: “I am delighted that we are able to implement this measure quickly and remove uncertainty from the market.
“We responded (last week) to clarify our policy intentions and by introducing the change so rapidly, we are providing certainty to people in the process of purchasing a home. Overall, increasing the LBTT threshold will help increase housing market activity, boost the construction sector and stimulate our economy.”
Good news for homebuyers in Scotland
The announcement from Kate Forbes has come as music to the ears of Scottish homebuyers. The cut in LLBT means 80 per cent of buyers will no longer have to pay tax on their property and for those buying a home that costs more than the lower threshold of £250,000, the changes will save you £2,100.***
Avant Homes chief operating officer, Mark Mitchell, commented on the LBTT changes: “We welcome the announcement made by the Scottish finance secretary on increasing the LBTT threshold.
“We anticipate there will be many new homeowners taking advantage of the rates holiday. It’s a much-needed boost for the housing sector and hopefully it will also have a positive impact on Scotland’s whole economic recovery.”
**Scottish Government - https://www.gov.scot/policies/taxes/land-and-buildings-transaction-tax/
*** Scottish Housing News - https://www.scottishhousingnews.com/article/finance-secretary-names-date-for-lbtt-threshold-change