2017 Budget Places More Pressure on Scottish Government to revise LBTT Rates
The Chancellor announced in his budget today that first time buyers in England will pay no Stamp Duty Land Tax (SDLT) on their purchase of properties up to the value of £300,000, a saving of £5,000 in tax for first time buyers on a purchase at that level.
In addition to this in more expensive metro areas no SDLT will be payable on the first £300,000 of the price for properties up to the value of £500,000. A first time buyer purchaser a property at £500,000 will pay around £10,000 of SDLT. The announced result of this will be 80% of all first time buyers not paying any SDLT.
Following the introduction of LBTT in Scotland, the tax paid on a £300,000 property is slightly less than in England at £4,600. A first time buyer in Scotland purchasing a property at £500,000 would pay £23,350, a difference of £13,350 from England.
The change to the tax in England for first time buyers will put further pressure on the Scottish Government to reciprocate the move in Scotland to aid in meeting the Scottish Government’s ambitious targets around housebuilding and home ownership.
The Scottish Government is already under substantial pressure to reduce rates of LBTT at the higher end of the market. Since the introduction of substantially higher rates for properties above £325,000, the higher end of the Scottish housing market has stalled, resulting in a substantially lower level of tax collection than forecast. The Government has been lobbied to reduce these rates to allow more transactions to take place at the higher end of the housing market, allowing for more tax to be collected. Whether these rate changes will be forthcoming remains to be seen, however the Finance Secretary has previously intimated that he would be willing to listen to industry and reconsider this.Back to news list