The Scottish Parliament has passed a Bill introducing the new Land and Building Transactions Tax which will replace stamp duty in April 2015. The new tax will be more closely related to the value of the property and is expected to be a vast improvement on the current stamp duty tax in place.
So, what does the new tax mean for you?
Currently stamp duty is paid on properties above £125,00 and is paid on the full value of the property. The rate paid is dependent on three criteria:
• the purchase price of the property
• whether the property is residential or not
• and, if the property is in a disadvantaged area.
For full details on Stamp Duty Land Tax are available at Gov.UK
In contrast, with the new Land and Building Transactions Tax only the proportion of the price above the tax thresholds will be liable for the higher rate of tax. The tax is likely to include a zero rate and at least two other bands. Scotland’s Finance Secretary John Swinney has advised that the rates and tax bands for the new system will not be announced until September 2014 at the earliest.
John Swinney, who introduced the Bill into Parliament, described the move as an “innovative approach to taxation that is much better aligned with the Scottish market, with Scots law and practices, and the principle of progressive taxation.” He claimed that the legislation would also be more efficient and less costly than the UK Government’s approach.
Speaking ahead of Tuesday’s final Holyrood debate on the Bill, he added that the new tax would “give us the opportunity to better support first time buyers trying to get onto the housing ladder or families buying bigger homes that better suit their needs”.
