SCOTTISH PROPERTY MARKET REACTS TO LBTT
Earlier this month, the Scottish government announced it was to replace traditional stamp duty with a new Land and Buildings Transaction Tax (LBTT) in April next year. Estate agents are now reporting that the top end of the market is much busier than would normally be expected for this time of year, with a surge of activity seen among buyers and sellers.
With relatively little time until LBTT comes into force, it appears that everyone is looking at ways to avoid being hit by the new tax. The Herald reports that potential buyers are looking to secure their new property before the end of the year in order to avoid paying the increased amount, while sellers are keen to conclude a deal before an expected slowdown of the market with the arrival of LBTT in the spring.
Inner cities are among the areas most affected, with properties in Edinburgh, Glasgow and Aberdeen falling within the higher tax thresholds. Cities in England and Wales would likely see a similar phenomenon if LBTT was replicated here, as well as more affluent regions such as the South East.
What is LBTT?
LBTT will mean that anyone owning a home in Scotland worth more than £325,000 will end up paying more tax than they would have under stamp duty, while those living in a lower value property will see a decrease in the amount they pay.
This has led to criticism in some quarters of what is perceived to be a “mansion tax”, and the fallout should be of interest to those in England and Wales as ministers monitor the results of the switch. Indeed, former England footballer Sol Campbell recently made headlines after slamming Labour’s plans to introduce higher stamp duty amounts on more expensive properties if they are elected.
However, Finance Minister John Swinney says that stamp duty will either lower or remain the same for the majority of Scots, and that the change will in fact boost the Scottish housing market in the long term.
Are you paying too much tax on your home?
If you currently live in England and Wales, you will be fully aware of the issues surrounding stamp duty as it stands. Fortunately, with Fiducia there are ways to mitigate this by using efficient and compliant solutions that will mean you do not pay any more tax on your property than is necessary.
If you would like to know more about how our tax experts can help you, call 01625 599 200 today.