14 Dec 2017

Scottish Budget: Tax cut announced for first-time buyers

Scottish Budget: Tax cut announced for first-time buyers

First-time homebuyers in Scotland will not have to pay Land and Building Transaction Tax on properties costing up to £175,000.

Finance Secretary Derek Mackay announced the move in today’s Scottish draft budget.

However, those looking to buy their first home north of the border will be disappointed that first-time buyers south of the border are getting a more generous deal than them.

Chancellor Philip Hammond said in last month’s UK Budget that he was abolishing Stamp Duty Land Tax for new owners spending up to £300,000 south of the border.

Stamp Duty is devolved to Scotland, where it is known as Land and Building Transaction Tax (LBTT).

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Mr Mackay said in his speech today: “As part of our support for housing, we are not just investing £3billion over this parliament to increase the supply of affordable housing, but we will provide more support to help people to own their first home. These changes to LBTT mean 80% of first-time buyers will pay no tax at all on the purchase of their first home.”

The Scottish Government also announced today that the residential and non-residential rates and bands for LBTT will remain unchanged.

Alan Cumming, National Estate Agency Director at Aberdein Considine, said the move was a welcome boost for first-time buyers, but perhaps a missed opportunity to stimulate the top end of the market.

"The cabinet secretary has gone some way to closing the gap between first-time buyers in England and Scotland, but some will feel he hasn’t taken the necessary steps to address the difficulties of those struggling to buy their first home in more expensive parts of the country," he said.

"It is disappointing that he has chosen not to examine the middle and upper bands of LBTT, which have caused fundamental market interference in Scotland, particularly in the £500,000-plus price bracket where significant sums become due. 

"Due to the bottleneck being created at the top end of the market, the current structure is expected to raise tens of millions less than forecast over the life of the current parliament. This was a missed chance for Mr Mackay to address that."

Help for first-time buyers

Buying a home is often the single most important financial transaction a person will make in their lifetime, so it’s important to make the correct decisions.

As an estate agent, law firm and independent mortgage adviser, Aberdein Considine offer everything you need to buy your first home - all 'under one roof'.

CLICK HERE to find out more.

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