If you have been watching the news lately, or been caught up in the purchase of a new property, you’ve probably heard all about the current LBTT relief here in Scotland and the rest of the UK. But with the temporary relief on LBTT due to end in just a matter of weeks, can you still beat the end of March LBTT rise?
First of all, what is LBTT?
The term LBTT is an abbreviation for the “Land and Buildings Transaction Tax” and is widely known as the Scottish equivalent of Stamp Duty. It is a tax you would usually pay when buying a property (or land) in Scotland, with how much you will pay being determined by the purchase price of the property; this is worked out in rate bands.
And what are the LBTT rate bands?
Generally speaking they are as follows*:
| Purchase Price (£) | LBTT Rate (%) |
| Up to £145,000 | 0% |
| £145,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
However, from July 2020 there has been a relief on LBTT, meaning you aren’t required to pay from a purchase price under £250,000. Broken down into the different rate bands this works out as:
| Purchase Price (£) | LBTT Rate (%) |
| Up to £250,000 | 0% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
This has meant that as long as your property has been under the purchase price of £250,000, you haven’t had to pay LBTT. A move that has understandably been welcomed by many home buyers!
*Different rates apply when buying a second home.
Why has there been a relief on LBTT?
Much like the majority of business in 2020, the property market took quite a hit thanks to the Coronavirus Pandemic. The decision to introduce a relief on LBTT was made to encourage people to start buying property again, particularly if they had been holding off due to being hit financially during the first UK Lockdown.
What is happening in March 2021?
This relief in LBTT has only been a temporary move, one that is due to finish at the end of March, so from 1st April 2021, you can expect to pay the usual rates of LBTT again.
Luckily for First Time Buyers, after the 1st April 2021 they will still be able to benefit from a relief on LBTT, escaping paying on purchase prices of up to £175,000 (instead of the usual £145,000). Granted it’s not quite as high as the £250,000 but it is still an amount that most First Time Buyers will continue to benefit from.
Is it the same across the UK?
Unfortunately for property buyers in Scotland, no. There has been a further extension of the relief on Stamp Duty for our neighbours South of the Border but here in Scotland it has now been confirmed that the LBTT rates will return to normal on the 1st April 2021.
So, can I still beat the LBTT rise?
The relief on LBTT will be in effect until the 31st March 2021 so technically, yes. However you will need to act fast! There are many things that can cause bumps in the road when it comes to completing the purchase of a property but having a good solicitor to act for you, like Beveridge Philp and Ross, is your best bet in being able to still beat the LBTT rise.
For more information on the current rates of LBTT, or for any of your buying/selling property needs, get in touch today on 0131 554 6244 or email: mail@bprsolicitors.co.uk.