Scottish Gov proposes higher LBTT rates for additional properties
Posted in News Headlines The Scottish Government has proposed an increase in Land and Buildings Transaction Tax for some transactions.
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Under the proposals, an additional 3% rate will apply to the purchase of additional properties, such as buy-to-let and second homes, on top of the existing LBTT charge.
The new rate is set to come into effect from 1 April 2016.
The proposed 3% rate will be levied on the total price of the property for all relevant transactions above £40,000 and will be in addition to the current LBTT rates. The additional rates are set out in the table below.
The UK Government announced a similar policy for SDLT at the Autumn Statement 2015. The UK government is expected to release a consultation on the proposals win the coming weeks.
The chart below compares the different proposed purchase taxes across the UK.
The Scottish Government has forecast that it will raise overall LBTT receipts in 2016-17 by between £17 million and £29 million, rising to a possible £66 million by 2020-21. Overall the Government expects LBTT will raise £295 million in 2016-17.
"There will be opportunities for buyers purchasing additional homes to bring forward transactions ahead of April 1st 2016 in order to minimise their tax burden. As a result, we could see a spike in transactions between now and the end of March. Buy-to-let investors will also be able to continue offsetting all stamp duty against capital gains tax when they sell their property."
_Oliver Knight