Swinney to unveil revised LBTT rates this week

Cabinet Secretary for Finance John Swinney is expected to announce revised rates this week for the land and buildings transaction tax, the Scottish Government's replacement for UK stamp duty land tax from 1 April 2015.

Mr Swinney will tell MSPs on Wednesday what changes he proposes to make in the light of the Chancellor George Osborne's decision to reform the method of calculating SDLT, announced in the Autumn Statement.

Mr Osborne adopted the "bands" principle already proposed for LBTT, so that different rates now apply to different portions of a purchase price if it exceeds the tax threshold, in place of the "slab" system by which the whole of the price became taxable at a certain rate once the threshold for that rate was passed. However he set rates that undercut those previously proposed in Scotland, so that the purchaser of any house bought for more than £250,000 will pay more, and at higher prices very substantially more, under the proposed LBTT rates.

Following a one year only agreement with the Chief Secretary to the Treasury setting the adjustment to Scotland’s block grant that will take place as a result of the Scottish Government taking responsibility for raising some revenues, Mr Swinney has now indicated that he will review the tax rates.

The Finance Secretary commented: “The Chancellor’s decision to introduce a new stamp duty system overnight, without warning and consultation, means that while 80% of homeowners continue to pay less tax or no tax at all under the Scottish system, we now have the opportunity to review the rates and ensure they are right for Scotland.

“I will announce my conclusions to Parliament on Wednesday."