The Scottish Budget on 14 December 2017 announced a Land and Buildings Transaction Tax (LBTT) first time buyer relief along similar (but less generous) lines to the Stamp Duty Land Tax (SDLT) first time buyer relief announced in Autumn Budget 2017.
The LBTT first time buyer relief will be available on purchases of Scottish residential property up to £175k. Where first time buyers purchase a property in excess of £175k, the first £175k will benefit from a 0% rate.
This will provide a saving from LBTT of up to £600 for first time buyers.
In comparison the UK Government’s announcement in last month’s UK Autumn Budget provided relief for first time buyers on the first £300k on purchases of residential property up to £500k; this provided a saving of up to £5,000 for first time buyers of residential property elsewhere in the UK.
Also unlike the SDLT relief, the LBTT first time buyer relief is not an immediate change and will be subject to consultation before being introduced in 2018/19.
No other changes were announced to the LBTT bands or rates meaning that purchases of residential property in Scotland costing over £333k suffer a higher LBTT charge than the equivalent SDLT. For example purchases of a property costing £350k/£450k suffer respectively £850/£5,850 more transaction tax in Scotland than the equivalent purchases made elsewhere in the UK.
