Shift of position

Home buyers benefit as Forbes concedes LBTT cut

Kate Forbes

Kate Forbes: ‘I have listened to calls’

Scottish Finance Secretary Kate Forbes unveiled a cut in the cost of buying a home just two days after the government ruled out such a move.

Ms Forbes told MSPs she was raising the threshold for paying land and buildings transaction tax from £145,000 to £250,000,.

But she came under new pressure not to delay implementing cut in tax, or risk stagnating the market.

Her move follows Chancellor Rishi Sunak’s decision to raise the threshold of stamp duty land tax in England and Northern Ireland.

The Scottish government had indicated earlier this week that “there are no plans to reduce LBTT”. Already half of all buyers pay no tax.

However, Ms Forbes said today that raising the threshold would now mean eight in ten would not pay the tax. The new rate will be introduced “as soon as possible”.

Aberdein Considine sale

Cut should stimulate market

“We continue to focus support on first‑time buyers and in assisting people as they progress through the property market,” said told parliament.

“I have listened to calls for me to raise the starting threshold to LBTT to help stimulate housing market activity and the economy.  It is important that any change made in Scotland is focused directly on the particular needs of the Scottish economy.   

“Today I can announce that I will increase the starting threshold for residential LBTT from £145,000 to £250,000.  Because of the time required to prepare legislation, and for Revenue Scotland to be ready to collect and manage the tax, the change will not come into force immediately.

“But I will work to enable this to be introduced as soon as possible.”

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The rates for the Additional Dwelling Supplement and non-residential LBTT remain unchanged.

All home movers purchasing a property above £250,000 will be £2,100 better off.

Ms Forbes said she was “also heeding the warning from the Institute of Fiscal Studies that “[first-time buyers] are a group that might actually be made worse off by the policy”.

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