Land and Buildings Transaction Tax Latest Update

The Deputy First Minister and Cabinet Secretary for Finance, John Swinney, has recently announced new LBTT rates.  These rates will apply to residential property purchased in Scotland from 1st April, 2015.  The rates replace those previously announced in October of last year.  The rates announced are as follows:-


Up to £145,000.00 0%
£145,001.00 – £250,000.00 2%
£250,001.00 – £325,000.00 5%
£325,001.00 – £750,000.00 10%
Over £750,000.00 12%


In simple terms, any property up to £145,000.00 can be considered in a zero band.  No LBTT will be payable.  It is believed that this change will help first time buyers and it has been estimated that half of purchases from 1st April will not incur any tax.


LBTT is calculated on the balance of the purchase in any particular band.  For example, if you purchase a property for £175,000.00, the first £145,000.00 of the price does not attract LBTT, but the balance of the price, in this example, £30,000.00, will attract LBTT  of £600.00.  Similarly, if you purchased a property for £275,000.00, you would pay 2% on the balance of the price up to £250,000.00 (£105,000.00 at 2% = £2,100.00) plus 5% on the remaining balance of the price up to £275,000.00 (£25,000.00 at 5% =£1,250.00).


Buyers will compare Scottish LBTT with the new rates of SDLT introduced by the UK Government in December of last year.  For purchases above £330,000.00, the amount payable under LBTT will be more than under SDLT.