Stamp Duty is replaced by the new Land and Building Transactions Tax.
New rules in Scotland will mean that homebuyers will not pay tax on properties costing less than £135,000, as Stamp Duty is replaced by the new Land and Building Transactions Tax.
The new tax comes into effect on the 1st April 2015, and based on the rates announced, buyers purchasing a home worth less than £320,000 or less will see their stamp duty payments reduced under the new Land and Building Transaction Tax (LBTT), benefitting some first-time buyers and those keen to move up the housing ladder.
However, the changes are not so beneficial at the other end of the property ladder. Under the current system, a house costing £500,000 will incur a stamp duty payment of £15,000. The upfront costs under the new LBTT system for the same property will be £27,300, an increase of 82%.
Oliver Knight of Knight Frank Research said, “Knight Frank welcomes the introduction of a more progressive method of levying stamp duty on residential property, but levying such high rates could entrench a more static market and could impede the efficient use of property.”