Forbes names date for LBTT threshold change
Kate Forbes: ‘we were given no notice of change’
Homebuyers will see rates of Land and Buildings Transaction Tax cut from next week, after Finance Secretary Kate Forbes came under pressure to announce a date.
The threshold at which LBTT begins to be paid will rise from £145,000 to £250,000 on Wednesday (15 July) and remain in place until 31 March 2021.
Excluding the Additional Dwelling Supplement, it means that 80% of home purchasers will pay no LBTT. Home movers buying a home costing more than £250,000 will save £2,100.
Ms Forbes had been criticised for announcing the change of threshold but failing to say when it would come into effect.
Critics said this would stagnate the market as homebuyers chose to wait for the tax change.
Today, following more calls for a date, she said: “I am delighted that we are able to implement this measure quickly and remove uncertainty from the market.
“The UK Government had weeks to prepare for its decision this week to raise the threshold at which Stamp Duty Land Tax is paid on house purchases in England and Wales, yet we were given no advance notice.
“We responded yesterday to clarify our policy intentions and by introducing the change so rapidly, we are providing certainty to people in the process of purchasing a home. Overall, increasing the LBTT threshold will help increase housing market activity, boost the construction sector and stimulate our economy.
“Alongside this distinctive Scottish approach to raising the starting threshold for LBTT, I am also targeting further support in other areas. For example, we are injecting £50m into our First Home Fund, which provides first time buyers with up to £25,000 to buy a property. This will help an estimated 2,000 first time purchases.
“To mitigate the immediate adverse impact on the housing market in Scotland as a result of the Chancellor’s announcement, we are now working at pace on the necessary legislation and to ensure Revenue Scotland is ready to collect and manage the tax.”
Provisional affirmative legislation facilitating the change in LBTT threshold will be laid in the Scottish Parliament next week.
The change will be made with effect from Wednesday but will require approval by the Scottish Parliament within 28 days to remain in force.
The rates for the Additional Dwelling Supplement and non-residential LBTT remain unchanged.