Scottish government cuts LBTT to help home buyers
On 15 July, the Scottish government reduced the rate of Land and Buildings Transaction Tax (LBTT).
On 15 July, the Scottish government reduced the rate of Land and Buildings Transaction Tax (LBTT) following a similar reduction to the rate of residential Stamp Duty Land Tax (SDLT) announced by Chancellor Rishi Sunak in the recent Summer Economic Update.
LBTT is payable by the purchaser in a land transaction occurring in Scotland. SDLT applies to land transactions in England and Northern Ireland.
The threshold at which residential LBTT is paid has been raised from £145,000 to £250,000 in order to help homebuyers following the coronavirus lockdown. Announcing the change, Finance Secretary Kate Forbes said that 80% of homebuyers will be exempt from paying LBTT.
Scottish Finance Secretary Kate Forbes said:
‘Overall, increasing the LBTT threshold will help increase housing market activity, boost the construction sector and stimulate our economy.
‘Alongside this distinctive Scottish approach to raising the starting threshold for LBTT, I am also targeting further support in other areas. For example, we are injecting £50m into our First Home Fund, which provides first time buyers with up to £25,000 to buy a property. This will help an estimated 2,000 first time purchases.
‘To mitigate the immediate adverse impact on the housing market in Scotland as a result of the Chancellor’s announcement, we are now working at pace on the necessary legislation and to ensure Revenue Scotland is ready to collect and manage the tax.’