Residential  

Scotland and Wales announce property tax cuts

Scotland and Wales announce property tax cuts

Scotland and Wales have announced a temporary increase in the thresholds at which tax will apply on residential property transactions.

In Scotland, the threshold at which Land and Buildings Transaction Tax (LBTT) is paid has been raised from £145,000 to £250,000.

According to the Scottish government, the change will see eight out of 10 house buyers exempt from the charge, while home movers purchasing a property over £250,000 will save £2,100.

The revised rates and bands for residential property transactions will apply from today (July 15) until March 31, 2021.

Land and Buildings Transaction Tax: Scotland

PurchasepriceResidential LBTT
Up to £250,0000%
£250,001 to £325,0005%
£325,001 to £750,00010%
Over £750,00012%

The Welsh government has also announced a temporary increase to the nil rate band of Land Transaction Tax (LTT) for residential property transactions.

From July 27, the nil rate band for main residential properties will increase from £180,000 to £250,000 until March 31, 2021.

Land Transaction Tax: Wales

Price Threshold

MainResidentialRate

The portion up to and including £250,0000%
The portion over £250,000 up to and including £400,0005%
The portion over £400,000 up to and including £750,0007.5%
The portion over £750,000 up to and including £1.5m10%
The portion over £1.5m12%

In her announcement Rebecca Evans, Welsh minister for finance, said the new threshold would mean that only about 20 per cent of those liable to pay the main LTT rates would pay any tax at all.

Ms Evans added: “Those buying properties costing more than £250,000 will make a saving of £2,450 over that which would previously have been payable”.

Ms Evans said the changes were in response to the increase in the residential stamp duty threshold in England and Northern Ireland.

In his summer statement last week (July 8) chancellor Rishi Sunak confirmed an immediate increase in the residential stamp duty threshold from £125,000 to £500,000 until March 31, 2021.

chloe.cheung@ft.com