LBTT - dawn of a new era for Scotland

Tuesday 24 March 2015

Unless you’ve been hiding in a cave for the last six months, you’ll no doubt be aware that the new Land and Buildings Transaction Tax took effect in Scotland yesterday.

The changes bring about the biggest shake up yet in a long series of stamp duty changes and are the first taxes to be implemented by the Scottish Parliament for 300 years.

Here is a comparison old vs new:

NEW                                                                     
Up to £145,000 - 0%                      
£145,001 to £250,000 - 2%                      
£250,001 to £325,000 - 5%                          
£325,001 to £750,000 - 10%                        
£750,001 and over - 12%                        

OLD
Up to £125,000 - 0%
£125,001 to £250,000 - 2%
£250,001 to £925,000 - 5%
£925,001 to £1.5m - 10%
Above £1.5m - 12%

A tax calculator based can be found on Revenue Scotland’s website - www.revenue.scot. The new rates will only be payable on the portion of the total value which falls within each band.

First time buyers, will be pleased that they will not be penalised by the new rates. Add to that the fact they can also benefit from Help to Buy ISA Windfalls of up to £6000 per couple announced by Chancellor George Osborne on Budget day and they should be happy campers.

Mark Hayward, NAEA said:

“The changes to stamp duty in April have been well signposted in advance of implementation; no doubt LBTT will have some short term limited impact until the market factors-in the changes and adjusts accordingly”

Anyone buying a house above £325,000 will pay more in LBTT and a spokesperson for Council of Mortgage Lenders (CML) said:

“The most affected are going to be particularly those purchasing ‘family homes’ in some of the ‘hot spot’ housing markets in Scotland. The people purchasing in this category are not necessarily “super rich” and the measure has the potential to adversely impact on recovery of the housing market in these areas.”

Let us know how you think the changes will the affect the market? – Join in the conversation on Twitter - #NAEALBBT

Online portal goes live ahead of launch
Last month Revenue Scotland gave users of its online portal the ability to create draft tax returns for the Land and Buildings Transaction Tax (LBTT) in preparation for the formal launch of Revenue Scotland yesterday.

The move was designed to give conveyancers, solicitors, and other users the opportunity to familiarise themselves with the return and the online system. Draft returns could be saved at this point, and as of yesterday returns could be submitted. Users who have signed up to the portal can access it at: https://login.revenue.scot For manual returns, a downloadable form is available.

Eleanor Emberson, Chief Executive of Revenue Scotland, said:
“Giving users early access to the system allowed them to get a feel for it by creating draft returns before 1 April. This is another example of our commitment to working with stakeholders to ensure we deliver a system that is responsive, user-friendly and efficient, and I’m sure users will have found this lead-in time useful.

“Coupled with the additional assistance available from our support desk, I hope users will be navigating the system and the returns process with ease.”