The proposals will bring the LBTT more in line with other parts of the UK, which should clarify individual liabilities.
Extensions to timelines are particularly welcome, doubling the time allowed to purchase a new main residence after disposing of a previous property from 18 to 36 months. Provisions for those with a court-ordered divorce or settlement agreement are now clearer and provide greater relief. We have suggested that the allowance for those who have a small share in a property through joint ownership, such as from inheriting a portion of a property, is not sufficient considering the average cost of housing in Scotland. Furthermore, we have argued that this may disproportionately affect those in rural or island communities where house prices are higher.
Although not included in this consultation, Propertymark has again outlined concerns over the increase to the ADS from 4% to 6%, which came into force in December 2022. This additional rate increases the cost of purchasing a buy-to-let property and, coupled with the rent cap imposed by the Cost of Living legislation, inhibits landlords’ ability to recuperate their investments. Propertymark continues to call for these restrictions to be dropped to ensure investment and reduce supply pressures in the private rented sector.
Additional Dwelling Supplement increased in Scotland
From today, 16 December, the Scottish Government has raised the Land and Buildings Transaction Tax (LBTT) from 4% to 6% on additional properties with the aim of raising £34 million and provide opportunities for first-time buyers.
