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, 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 costing LESS than £250,000

You will not incur any of the standard Land and Buildings Transaction Tax, but you will be liable for the ‘Additional Dwelling Supplement’, which is at 4% of the total purchase price.  For example, if you buy a property at £100,000, you’ll pay an ADS of £4000.

I already own a property but I would like to purchase another one costing MORE than £250,000

If you purchase between 15 July 2020 and 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%

In addition, you will be liable for the ‘Additional Dwelling Supplement’, which is 4% of the total purchase price.  For example, if you buy a property at £300,000, you’ll pay an ADS of £12000


 

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.

Further Guidance Issued on 29 June Property Market Restriction Easing

The Scottish Government announced last week that moving home would be permissible from 29th June 2020.  It has now issued further guidance on what that means in practice for Scotland’s property market.  The overarching guidance remains unchanged in that whenever possible elements of a property sale should be conducted remotely using digital technology.

New Build Property

From 29th June, you will be allowed to visit show homes by appointment and where it is safe to do so.  Visit the website of your chosen house-building firm to see what access measures have been put in place.

Estate Agents / Resale Property

From 29th, Estate Agents will be able to visit houses to prepare valuations, take pictures, and other activities necessary to help bring a property to market.  Surveyors will be able to visit properties to prepare home reports.  Our Estate Agency partners, Keys Estate Agents in the West and ESPC in the East, are ready to help get your property sold – contact us if you have a property to sell.

House Viewings should continue to be ‘virtual’ by default.  If you are ready to make an offer on a property an in-person viewing is permissible by appointment and involving only members of one household.  ‘Open House’ Viewings are NOT allowed at this time.

Covid-Precautions

You will almost certainly see all property professionals wearing face coverings when conducting aspects of property sales.  You may be asked to wear face coverings too. You will be asked to self-certify that you:

  • Do not have symptoms of coronavirus (high temperature, new and continuous cough, loss or change of sense of smell or taste)
  • You are not waiting for a coronavirus test result or have tested positive for coronavirus
  • You do not live with somebody who has symptoms, is waiting for a test result or has tested positive.

The Scottish Government has created guidance on face coverings and other precautions relating to covid-19 which you can read here.

Visiting Our Offices

Our offices in Livingston and Glasgow will reopen to the public BY APPOINTMENT only from Monday 29th June 2020.  Appointments will be by exception – our default position will be to continue to conduct business remotely if it is possible and practical.

Conclusion

Whilst the Property Market is restarting, this does NOT mean a return to pre-covid operations.  The buying and selling of property will be subject to safety protocols and will (and should) feel unusual.  What will not change is the professional and efficient conveyancing and estate agency services we offer our clients and we are delighted that Scotland’s vibrant and economically important property market is opening further from Monday 29th June 2020.

Property Market Restart Begins To Gather Momentum

The Scottish Government’s review of the lockdown restrictions (Thu 18) has delivered some good news for property buyers:

  • Construction will restart on new-build properties from Monday 22nd June.
  • There will be a relaxation of the restrictions on moving house from Monday 29 June.

conveyancing of propertyIf you have a property you would like to purchase (or one to sell), get in touch and we’ll get started.  There is no need to wait – in fact, we would encourage you to act now if you have a property in mind.

Our solicitors are seeing an increase in instructions from buyers to begin the conveyancing process in recent weeks and we expect a further upturn in business with ‘phase two’ of lockdown easing now beginning.

We are open for business

Wallace Quinn have been open for business throughout the lockdown process and we will continue to work remotely with clients to progress Conveyancing, Wills, Powers of Attorney, Equity Release and all other legal matters.  If you would like to speak to a solicitor on any legal matter, please fill in the form below and we’ll get back to you within one working day.

Finally, no changes have been announced in relation to offices, meaning our premises in Livingston and Glasgow will remain closed to the public for now.


First






Capital Gains Tax Changes for 2020

money trapped in a houseCapital Gains Tax changes for 2020 came into effect on 6 April.

This could have an impact on the amount owed to HMRC following the sale or gift of a property.  Three principle changes to the legislation centre around CGT liability, lettings relief and principle private residence status. In the legislation sales and other transfers such as gifts are referred to as ‘disposals’.

Capital Gains Tax Liability

Until 6April 2020, where a CGT liability existed, you had until 31 January following the end of the tax year in which the disposal was made to report this to HMRC and pay any CGT.  From 6 April, you will need to notify and pay CGT within 30 days of the disposal.

Lettings Relief

Until 6 April, you were entitled to some CGT relief if you rented a property which was designated your ‘Principle Private Residence’.  From 6 April, you will only qualify for some relief if you also occupy part of the property while letting the other part.

Principle Private Residence Status

Until 6 April, if you rented your principle private residence, you didn’t pay CGT on the gains from the last eighteen months of the let.  From 6 April, this reduces to the last nine months of any let.

Capital Gains Tax Changes for 2020 – are you affected?

Whilst we can offer a general view on whether the changes will affect your property disposal, we are unable to give advice on tax matters and would strongly suggest clients seek specialist advice from an accountant, tax adviser or Independent Financial Adviser (IFA) to discuss their individual situation.

PODCAST 4 – PROPERTY AUCTIONS AND TELEVISION SHOWS

TV Property Shows – what you need to know before going to a property auction. In this podcast, we find out why property shows on television are perhaps giving an unrealistic idea of what goes on in the conveyancing process and why buying a property at auction has some considerations all potential buyers should be aware of before bidding. If you are thinking of bidding for property at auction, we strongly urge you to discuss the property and the process with a solicitor before bidding!

 

 

If you’re buying a new build property you can generate a quote for your conveyancing here: https://www.wallacequinn.co.uk/new-build-calculator/

property auctions a sign