The Scottish Parliament has recently published new legislation that will introduce a supplement on purchases of additional residential properties in Scotland.
The Land and Buildings Transaction Tax (LBTT) (Amendment) (Scotland) Bill was announced at the end of last year by as part of the Scottish Government’s draft 2016-17 budget, and proposes a supplement on the purchase of additional homes, for example second homes or buy-to-let properties.
The planned supplement is three percent of the total price of the property for all relevant transactions above £40,000, and will be paid in addition to the current LBTT rates.
The draft Budget estimated that the new supplement would raise about £23 million in 2016-17, and it is intended to take effect from 1st April 2016.
“Our priority is to make sure that first time buyers have the greatest possible chance to get a foot on the property ladder,” explained Deputy First Minister John Swinney. “That is why I decided to take action to avoid any potential distortions which could arise in Scotland from the new higher rates of stamp duty land tax payable on the purchase of additional residential properties, announced by the Chancellor of the Exchequer in his Autumn Statement on 25th November 2015.”
“This is particularly relevant to the purchase of additional residential properties, at the lower end of the market, which could make it more attractive to invest in such properties in Scotland compared to other parts of the UK,” he added. “Our LBTT additional homes supplement will ensure that opportunities for first time buyers to enter the housing market in Scotland remain as strong as they possibly can.”
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