Stamp Duty Changes For Scottish Property Market
In a landmark move, the Scottish Government has passed new legislation which allows Holyrood to set the rate of tax and collect its own revenue on the sale of property from April 2015.
The new tax, known as Land and Building Transactions Tax (LBTT) will replace the current Stamp Duty Land Tax (SDLT)
Finance Secretary John Swinney said ‘The current system will be replaced by a more progressive tax and will be more related to an individual’s ability to pay than Stamp Duty, because it would be more closely linked to a property’s value.’
Whilst Mr Swinney has stated he will not announce the rates and tax bands for the new system until after September 2014 the Government set out certain assumptions in their consultation paper in January of this year.
If these rates were introduced this would mean that those individuals buying property worth less than £300,000 are likely to be better off whilst those buying over this threshold would pay more LBTT tax than they would under the current system of Stamp Duty.
Winners and Losers
Whilst we are keen to see the detail, what we do know is that there will be winners and losers when the new tax is introduced.
Those considering deferring a house move until April 2015 in the hope of paying a reduced tax could possibly lose any financial advantage if we see an upward pressure on house prices.
The Royal Institute of Chartered Surveyors recently suggested that the longer term outlook is likely to see house prices increase. A net balance of 28% more surveyors predict a rise in prices over the next 12 months and they report that this is the most positive reading since July 2010. Surveyors responding to the survey suggest that, on average, house prices are likely to rise by 1.5% over this period.
Is Now The Time To Move?
If you are thinking about moving house but are uncertain whether now may be the right time for you – why not ask us for a Pre-Sale Consultation? These are designed to help you understand the dynamics of the market you are moving from and gain an understanding of how the market is performing in the area you are considering moving to.