Homebuyers get boost as purchase tax threshold raised

Scots looking to buy a new home worth up to £250,000 will not have to pay Land and Buildings Transaction Tax after the Scottish Government moved to give the property market a boost as the Covid-19 lockdown ends.

Scottish finance minister Kate Forbes said the government would move to raise the LBTT threshold from £145,000 as soon as possible, taking eight out of ten residential property transactions out of taxation.

The government's first time buyers scheme will also see a further £50m to help people with deposits for a home.

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Cabinet Secretary for Finance, Kate Forbes MSP has made her response to the Chancellor's summer statement.
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Ms Forbes announcement in Holyrood came as she responded to yesterday’s package of economic stimulus measures by the Chancellor of the Exchequer, which included a stamp duty “holiday”. Rishi Sunak said residential property transactions in England and Northern Ireland, costing up to £500,000, would be exempt from stamp duty land tax until March 31 next year.

The Scottish Government immediately came under pressure from the Scottish property sector and opposition MSPs to follow suit with LBTT – the tax that replaced stamp duty in Scotland five years ago.

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Today she told MSPs that she had “listened” to those calls, and would be raising the threshold at which LBTT must be paid from £145,000 to £250,000 to “stimulate housing market activity and the economy”.

However unlike in England the change won’t happen immediately, raising concerns that the housing market could now stall until it is implemented.

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Ms Forbes said “It's important that any change is focused on the particular needs of the Scottish economy,” she said. “Because of the time required to preapre legislation and for Revenue Scotland to be ready to collect and manage the tax, the change will not come into force immediately. But I will work to make sure it does so as soon as possible.

"Eight out of ten people purchasing a property will be taken out of LBTT and all home movers purchasing a property above £250,000 will be £2100 better off.”

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