Countdown begins to LBTT

Tuesday 24 March 2015

Unless you’ve been hiding in a cave for the last six months, you’ll no doubt be aware that there’s just a week to go now until the new Land and Buildings Transaction Tax takes effect in Scotland.

The changes which come into force from 1 April 2015, bring about the biggest shake up yet in a long series of stamp duty changes.

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.”

Online portal goes live ahead of launch
Revenue Scotland has today given 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 on 1 April.

The move is designed to give conveyancers, solicitors, and other users the opportunity to familiarise themselves with the return and the online system. Draft returns can be saved at this point, but no returns can be submitted before April 1, when LBTT comes into effect for transactions in Scotland.  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 will allow 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 find 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.”

With just a week to go, let us know how you think the changes will the affect the market? – Join in the conversation on Twitter - #NAEALBBT