Land and Building Transaction Tax (or “LBTT”) replaced Stamp Duty Land Tax payable on the purchase of a property in Scotland on 1 April, 2015. The additional dwelling supplement (“ADS”) was introduced by the Scottish Government in 2016 and effectively meant that where someone wished to buy a second home (for example a holiday home or a buy to let property) they would incur an additional charge of 3% payable on top of the existing LBTT rate.
That ADS rate has now been increased to 4% following the last budget, and the increase came into effect on 25 January 2019.
The Scottish Government have put in place transitional arrangements where if a transaction settles after 25 January, 2019 but the missives were concluded for the purchase before 12 December, 2018 then the lower rate of 3% for ADS would apply.
It remains the case that where someone is purchasing a new residential property to occupy as their principal home, but the new purchase takes place before the sale of their existing property, then although the 4% supplement would be payable upon purchase of a new property, it would still be refundable thereafter so long as the previous property is sold within 18 months of the purchase.
It is important for the purchasers to take into account this additional LBTT supplement when calculating their financial position in advance of purchasing a new residential property, as the supplement of 4% does require to be paid on settlement.
LBTT can often be quite complicated depending on circumstances and accordingly if you wish to discuss matters with one of our experienced property lawyersplease feel free to contact one of our offices.
"As always we say a huge thank you for all your help in selling our property. All your staff are wonderful."
"Mr Danks and his team were excellent from start to finish. Totally the best service I have had for a long time. I will not hesitate to recommend you to anyone."
"This was the first time ever I have had to sell my house, I didn't have a clue. Paris Steele helped me every step of the way - and more. The level of expertise I received was outstanding."
"Very pleased with service. Fraser answered everything and sorted out many problems. Highly recommended."
"Everybody we spoke to was very helpful. Nothing was too much trouble. A big thank you."