From April 2015, Stamp Duty for Scottish residential and non-residential property sales (SDLT) will be replaced by a new tax, which will be collected within Scotland. It will be known as the Land and Building Transaction Tax (LBTT). LBTT, as part of the Scottish Government’s devolved tax raising powers, was going to be introduced regardless of the Referendum result.
While LBTT received Royal Assent in the summer of 2013, the final rates will not be announced until late autumn. We expect the Scottish housing sector to adjust to the new regime now that we have a robust market with sustained growth expected, following the Referendum result.
LBTT could favour residential sales at £180,000 or less under the Scottish Government’s proposed structure. Sales above £200,000 would incur a higher rate of tax than at present.
Should this progressive form of Stamp Duty be applied, it will introduce positive results for around 80% of buyers in the Scottish residential market, provided the market remains the same. However, 20% of house buyers will be hit with higher taxes.
There are no plans to reform Stamp Duty in the rest of the UK. Whilst we welcome a progressive new system, the proposed structure is likely to increase the costs to families and professionals looking to move up the housing ladder. The majority of housing suitable for these markets in the main cities of Scotland is priced at more than £300,000. On average, LBTT payments will be around 24% more than SDLT, therefore adding to the cost of moving for those living in Scotland’s key cities.
.jpg)
.jpg)
.jpg)
.jpg)