The Scottish government has announced rates for the new land and buildings transaction tax (LBTT), which is to replace stamp duty land tax (SDLT), in its draft Scottish Budget for 2015/16. The nil rate applies up to £135,000, rising to 12% on transactions over £1,000,000. The new rates will only be payable on the portion of the total value which falls within each band, as opposed to the ‘slab’ structure of SDLT when a threshold is crossed.
However, the CIOT published its calculations on the different amounts of tax house buyers will pay under the new system, showing that buyers of residential property worth less than £325,000 will pay less than under the current system of SDLT, and buyers of property worth more than £325,000 will pay more once the new tax comes into effect in April 2015. The CIOT suggested this could be seen as creating a Scottish ‘mansion tax’. Moira Kelly, chair of the CIOT’s Scottish taxes committee, said: ‘We welcome Scotland’s abolition of the “slab system” which distorted property sales by creating huge “cliff edges” at particular property values. That has created huge incentives to “game the system” over the years by claiming exaggerated values for fixtures and fittings.
‘The other big story from the rates announced is how much more progressive the new Scottish system will be. Those paying under £325,000 for a property will pay less and those paying more than that will pay more, in some cases much more. Many will see this as a Scottish “mansion tax”.’ The average price for a Scottish residential property is around £160,000.
The Scottish government has announced rates for the new land and buildings transaction tax (LBTT), which is to replace stamp duty land tax (SDLT), in its draft Scottish Budget for 2015/16. The nil rate applies up to £135,000, rising to 12% on transactions over £1,000,000. The new rates will only be payable on the portion of the total value which falls within each band, as opposed to the ‘slab’ structure of SDLT when a threshold is crossed.
However, the CIOT published its calculations on the different amounts of tax house buyers will pay under the new system, showing that buyers of residential property worth less than £325,000 will pay less than under the current system of SDLT, and buyers of property worth more than £325,000 will pay more once the new tax comes into effect in April 2015. The CIOT suggested this could be seen as creating a Scottish ‘mansion tax’. Moira Kelly, chair of the CIOT’s Scottish taxes committee, said: ‘We welcome Scotland’s abolition of the “slab system” which distorted property sales by creating huge “cliff edges” at particular property values. That has created huge incentives to “game the system” over the years by claiming exaggerated values for fixtures and fittings.
‘The other big story from the rates announced is how much more progressive the new Scottish system will be. Those paying under £325,000 for a property will pay less and those paying more than that will pay more, in some cases much more. Many will see this as a Scottish “mansion tax”.’ The average price for a Scottish residential property is around £160,000.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")