The SNP Government will reduce rates of Land and Buildings Transaction Tax (LBTT) from Wednesday 15 July, meaning 80% home buyers in Scotland will not be taxed.
The threshold at which LBTT begins to be paid will rise from £145,000 to £250,000 and remain in place until 31 March 2021. Home movers buying a home costing more than £250,000 will save £2,100.
Finance Secretary Kate Forbes MSP said:
“I am delighted that we are able to implement this measure quickly and remove uncertainty from the market.
“The UK Government had weeks to prepare for its decision this week to raise the threshold at which Stamp Duty Land Tax is paid on house purchases in England and Northern Ireland, yet we were given no advance notice.
“We responded 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.
“Alongside this distinctive Scottish approach to raising the starting threshold for LBTT, I am also targeting further support in other areas. For example, we are injecting £50 million into our First Home Fund, which provides first time buyers with up to £25,000 to buy a property. This will help an estimated 2,000 first time purchases.
“To mitigate the immediate adverse impact on the housing market in Scotland as a result of the Chancellor’s announcement, we are now working at pace on the necessary legislation and to ensure Revenue Scotland is ready to collect and manage the tax.”
Kenneth Gibson MSP said:
“Given the massive impact the coronavirus continues to have on the economy, it is important to stimulate it however we can and to keep the housing market moving.
“Suspending LBTT for 80% of transactions will provide a welcome stimulus for those who have been saving to buy a property but have become hesitant due to the current crisis.”
The change will be made with effect from Wednesday but will require approval by the Scottish Parliament within 28 days to remain in force. The rates for the Additional Dwelling Supplement and non-residential LBTT remain unchanged. More detail is available online.
Read more information on the First Home Fund.