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.


Land and buildings transaction tax (LBTT) 

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



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