First Time Buyer Relief
The property market in Edinburgh has become quite difficult for first-time buyers to get into. It is therefore great news for first time buyers that a new relief has been introduced to help them onto the property ladder.
As of 30th June 2018, the Scottish Government has introduced a first-time buyers’ relief on Land and Buildings Transaction Tax (LBTT). LBTT is the Scottish equivalent of Stamp Duty Land Tax. Before 30th June, LBTT was payable by all on properties costing £145,000 or more. First-time buyers will now be granted a tax relief on the first £175,000 of the purchase price.
In simple terms, should the purchase price for a first time buyer in Scotland be £175,000 or lower, no tax will be payable. Additionally, if the price exceeds £175,000, less tax will now be payable for first time buyers than previously. The following table, provided by Revenue Scotland, gives an indication as to the savings that will now be made:
|Purchase Price||Tax Due – With Relief||Tax Due – Without Relief|
Finance Secretary, Derek Mackay, believes that the change will benefit an estimated 12,000 people per year. Out of the 12,000, 7000 will pay less than £600 tax with the further 5000 saving an average of £290 according to the Scottish Fiscal Commission (SFC).
The new regulations bring Scotland up to speed with those south of the border, who introduced similar tax breaks last year.
The SFC anticipates that the changes will encourage an extra 150-200 property sales a year in the first-time buyers’ market. The savings made will now allow them to compete more regularly with property investors, who have the issue of being charged much higher tax rates.
For further information on first-time buyer’s relief, or any other queries regarding the sale or purchase of property, please get in touch with our property team on 0131 220 9167 or firstname.lastname@example.org.