Scottish house buyers will benefit from a land and buildings transaction tax concession similar to the stamp duty relaxation announced for the rest of the UK, but to a lesser extent and with a short delay in its introduction.
Cabinet Secretary for Finance, Kate Forbes MSP told the Holyrood Parliament that the starting threshold for LBTT for residential property transactions will be raised from £145,000 to £250,000.
Although the stamp duty concession announced by Chancellor Rishi Sunak on Wednesday came into force immediately, the LBTT change will not come into force until Revenue Scotland has amended its systems, which Ms Forbes said would happen "as soon as possible" – believed to be days rather than weeks. Once introduced, the change will remain in force until 31 March 2021.
She said the move would result in 80% of transactions in Scotland being LBTT exempt. In the rest of the UK, where a £500,000 threshold will apply (and average prices are around one third higher), the proportion will be 90%.
Above the Scottish threshold, the usual rates will apply, meaning that buyers at a higher price will each save £2,100. The additional dwelling supplement for second and subsequent homes will remain payable at 4% of the total purchase price.
Recognising that the concession may not benefit first time buyers, Ms Forbes also announced a further £50m for the Scottish Government’s first home fund, which supports first-time buyers with their deposits. She expected this to support an additional 2,000 first-time buyers’ purchases.
All the measures are part of the wider stimulus package to help boost the economy as it recovers from the COVID-19 lockdown.