John Swinney has announced the proposed rates and bands for the Land and Buildings Transaction Tax (LBTT) as part of the Draft Budget.
LBTT will replace Stamp Duty Land Tax (SDLT) in Scotland on 1 April 2015. The new tax will have a progressive structure to bands and rates (i.e. tax is charged on the proportion of the price exceeding the threshold (like income tax) rather than charging the higher rate of tax on the whole price (per SDLT). This approach is intended to remove the distortions in house prices which may result from the bunching of sales around the thresholds that can occur with SDLT.
Residential Purchases
The rates and bands which apply to the purchase of residential properties are as follows:
| Purchase price | LBTT rate |
| Up to £135,000 | 0% |
| Above £135,000 to £250,000 | 2% |
| Above £250,000 to £1,000,000 | 10% |
| Above £1,000,000 | 12% |
Non-Residential Purchases
The rates and bands which apply to the purchase of non-residential properties are as follows:
| Purchase price | LBTT rate |
| Up to £150,000 | 0% |
| Above £150,000 to £350,000 | 3% |
| Above £350,000 | 4.5% |
.
Non-Residential Leases
The rates and bands which apply to non-residential leases are as follows (as with SDLT, the rates are applied to the Net Present Value (or NPV) of the rent payable under the lease):
| NPV of rent payable | Rate of tax to apply |
| Up to £150,000 | 0% |
| Over £150,000 | 1% |
.
The following tax rates and bands will also be applied to any premium payable under the lease:
| Premium | Rate of tax to apply |
| Up to £150,000 | 0% |
| Above £150,000 to £350,000 | 3% |
| Above £350,000 | 4.5% |
.
Further information and tax calculators are available from the Scottish Government here.
A summary of the Land and Buildings Transaction Tax (Scotland) Act 2013 is available here.
