Additional first time buyer LBTT relief comes into force

First-time house buyers can now take advantage of a higher threshold for land and buildings transaction tax.

From 30 June 2018, the zero-rated LBTT threshold has been raised from £145,000 to £175,000 for first-time buyers. Around 12,000 first-time buyers each year are expected to benefit by up to £600, and 80% of first-time buyers will pay no tax.

First-time buyers buying a property above £175,000 will benefit on the portion of the price below the threshold.

The relief has been introduced by way of the Land and Buildings Transaction Tax (First-Time Buyer Relief) (Scotland) Order 2018, which follows a Scottish Government consultation earlier this year.

Where there is more than one buyer the relief will be available only if each and every buyer meets all the relevant criteria – principally that they have never had a “major interest” in a dwelling in Scotland or an equivalent interest in a dwelling situated anywhere else in the world.

Kate Forbes, Minister designate for Public Finance and Digital Economy, commented: “Alongside our shared equity schemes, the introduction of this new relief provides further support to first-time buyers and delivers on the commitment made by the Scottish Government as part of the 2018-19 Scottish budget.”

• Also now in force is the Land and Buildings Transaction Tax (Relief from Additional Amount) (Scotland) Act 2018, which makes retrospective the relief from the additional LBTT rate for second homes allowed by the Land and Buildings Transaction Tax (Additional Amount-Second Homes Main Residence Relief) (Scotland) Order 2017, which applies where spouses, civil partners or cohabitants jointly buy a house but the house being replaced is owned by only one of them. It received Royal Assent on 22 June 2018.