THE coming months are set to be an interesting and dynamic period for Scotland’s property market as we welcome the introduction of the Scottish Government’s new land and buildings transaction tax (LBTT) on 1 April replacing stamp duty.
I would offer my assurances to anyone who is preparing to sell and may be concerned that the new LBTT regulations will bring an end to the favourable and competitive conditions we’ve witnessed since the UK government decided to alter the stamp duty bands last October.
The new, more progressive, LBTT bandings will mean buyers will pay no tax on the first £145,000 of a property – that’s an extra £20,000 tax-free compared with the current stamp duty levels.
So, with the average price of a one-bedroom home across Scotland coming in at around £135,000, many buyers are in for a welcome break. I am confident this will provide an appealing incentive, together with a more favourable lending regime, to encourage those looking to take their first step onto the property ladder and for “second steppers” buying bigger homes.
As a result of this increase in buyers and the resulting competition this will create, there is potential for sellers to feel compelled to continue to bring properties to market to make the most of the emerging environment.
The best course of action for anyone preparing to buy or sell after 1 April is to take advice from the experts who can guide you through options best suited to your circumstances.
In addition to LBTT providing incentives for first-time buyers, new pension rules coming into force on 6 April will provide an additional boost to activity at the other end of the market, particularly among those looking for buy to let opportunities.
Therefore, for the majority of people, I believe that the new tax bandings present very little cause for concern.
Buyers and sellers alike need not be afraid of what is to come. With an abundance of excellently positioned and well-priced properties across Scotland, there has rarely been a better time to buy.
• Paul Hilton is chief executive of ESPC (Edinburgh Solicitors Property Centre)