Home buyers could save over £2000 in tax with temporary LBTT changes
The starting threshold for Land and Buildings Transaction Tax ( LBTT) on residential property sales in Scotland is rising from £145,000 to £250,000 from 15 July 2020 until 31 March 2021. This amounts to over £2000 in savings on a property bought for £250,000 and means that where the Additional Dwelling Supplement (ADS) does not apply, […]
The starting threshold for Land and Buildings Transaction Tax ( LBTT) on residential property sales in Scotland is rising from £145,000 to £250,000 from 15 July 2020 until 31 March 2021.
This amounts to over £2000 in savings on a property bought for £250,000 and means that where the Additional Dwelling Supplement (ADS) does not apply, no LBTT will be payable.
To find out how this change affects you, click on the relevant link below:
I’m a first time buyer and I’m buying a property costing less than £250,000
Good news – you’ll pay no LBTT at all on your purchase, as long as your purchase is AFTER 15 July and BEFORE 31 March 2021. All other legal fees and outlays remain unchanged. The changes to LBTT have no impact on Help To Buy (Scotland) or the First Home Fund.
I’m a first time buyer and I’m buying a property costing more than £250,000
You will pay LBTT, but NOT on the first £250,000 of the purchase price (as long as your purchase is AFTER 15 July 2020 starts and BEFORE 31 March 2021). You can work out your LBTT as follows:
The first £250,000 of purchase price 0%
Then £250,001 - £325,000 5%
Then £325,001 - £750,000 10%
Then over £750,000 12%
The changes to LBTT have no impact on Help To Buy (Scotland) or the First Home Fund.
I already own a property, but I would like to purchase another one
If you already own a residential property as your main home worldwide but wish to purchase another residentialk property, in addition to the Land and Buildings Transaction Tax you must pay on the price of the property, you will also be liable for the ‘Additional Dwelling Supplement’ (ADS). Since 5th December 2024, ADS will apply at 8% of the total purchase price. That means if you buy a property at £100,000, you’ll pay an ADS of £8,000 in addition to any LBTT you have to pay.
You can read more about the Scottish Government’s plans on their website.
If you have any other questions, please get in touch and discuss this with one of our solicitors.
