22 Nov 2017
First-time house buyers south of the border got a major boost from Chancellor Philip Hammond in today’s Budget.
He announced that he was abolishing Stamp Duty Land Tax (SDLT) for new owners spending up to £300,000 – saving them up to £5,000. Around 80% of first-time buyers will pay no SDLT at all.
However, new buyers in Scotland will have to wait and see if the Scottish Government will make a similar change north of the border in its own draft Budget on Thursday, December 14.
Stamp Duty is devolved to Scotland, where it is now known as the Land and Buildings Transaction Tax (LBTT).
North of the border, LBTT is not paid until a purchase price exceeds £145,000. Between £145,000 and £250,000 the rate is 2%, and rises to 5% between £250,000 and £325,000. From £325,000 to £750,000 the rate is 10%, and jumps to 12% above £750,000.
LBTT has not been short of controversy – frequently hitting the headlines for all the wrong reasons.
It recently left the Scottish Government with a £54million hole in its budget.
LBTT had been forecast to raise £538million in 2016-17, but only £483.6million was actually collected.
Criticism has continued to mount of LBTT from many quarters.
This includes from the country’s home-building industry, which repeated its call for the extension of the current 5% band to address the considerable drop in activity at the higher end of the property ladder as buyers either can’t afford the current levels of LBTT or consider the perceived punitive nature of the tax and choose to stay put.
Finance Secretary Derek Mackay claimed that, on business rates and Stamp Duty, the UK Government was following Holyrood's lead.
"We have already moved to make revaluations more frequent and the vast majority of first-time buyers are already exempt from tax when they buy a home," he added.
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