A consultation on the details of the first-time buyer relief from land and buildings transaction tax (LBTT) announced in the draft Scottish Budget 2018-19, has been launched by the Scottish Government.
Planned to be introduced in June 2018, the relief will effectively raise the zero-tax LBTT threshold for first-time buyers, of any age, from £145,000 to £175,000. Those buying their first property at above £175,000 will also benefit on the portion of the price between £145,000 and £175,000. Around 12,000 first-time buyers are expected to benefit from the relief each year by up to £600. An estimated 80% of first-time buyers will pay no LBTT.
The consultation, which includes a new draft schedule to the 2013 LBTT Act giving effect to the relief, seeks views on the Scottish Government’s proposals in terms of eligibility and implementation of the policy.
In general terms, the Scottish Government’s intention is that the relief will be available where:
- the buyer is a natural person;
- a single dwelling is purchased for more than £145,000;
- the buyer is a first-time buyer, who has never had a “major interest” in a dwelling in Scotland or an equivalent interest in a dwelling situated anywhere else in the world;
- the buyer intends to occupy the dwelling as their main residence;
- the effective date of the transaction is on or after the date that the relevant legislation comes into force, and consistent with any final transitional provisions.
In addition, to minimise complexity and address the risk of avoidance, where there is more than one buyer the relief will be available only if each and every buyer meets all the relevant criteria. If any of the buyers does not meet all the conditions, the relief will not be available.
The consultation will run for an abbreviated period of six weeks, until 23 March 2018. The results will inform final decisions and the detail of the relief and legislative proposals.