The Scottish government has opened a consultation into providing relief to First time buyers from Land and Buildings Transaction tax (LBTT).

Land and Buildings Transaction Tax (LBTT) is a tax on transactions in land situated in Scotland, and it replaced Stamp Duty Land Tax (SDLT) from 1 April 2015. Whilst the Chancellor announced that from 22 November 2017 there would be no SDLT for first time buyers purchasing homes in England and Wales costing up to £300,000, and relief available on the first £300,000 for homes costing up to £500,000 in London, Scotland currently offers no LBTT incentives to its first time home buyers.

However, on 9 February 2018 the Scottish government opened a consultation on LBTT first time buyers relief which proposes:

• Raising the zero rate threshold from £145,000 to £175,000 for first time buyers where:
  • The buyer is a natural person (not a company or other entity).
  • A single dwelling is purchased.
  • The buyer is a first time buyer, who has never had a ‘major interest’ in a dwelling in Scotland or an equivalent interest in a dwelling situated anywhere else in the world (including England and Wales).

• The buyer intends to occupy the dwelling as their main residence.

As the relief will operate by raising the zero rate threshold, even those purchasing property above the £175,000 limit will benefit from it. The Scottish Fiscal Commission have forecast that this will result in 80 per cent of first-time buyers in Scotland paying no LBTT at all, whilst all other first time buyers will see their tax reduced by £600. The intention is for the relief to be available from June 2018.

It is possible to respond to the consultation online and responses are invited by 23 March 2018.

Links:

Land and buildings transaction tax (LBTT) 

A consultation on the Proposed Land and Buildings Transaction Tax First-Time Buyers Relief

 

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