More positive news for the Scottish property market today as Finance Secretary, Kate Forbes, announced a temporary cut on LBTT.
The new threshold where tax kicks in will raise from the current position of £145,000 to £250,000, although second homes are exempt. It is expected that 8 out of 10 house sales will benefit from the changes with home buyers being in the region of £2,100 better off.
The move comes after Chancellor Rishi Sunak announced a stamp duty holiday on transactions in England and Northern Ireland as part of his wider programme of measures to kickstart the UK economy. Pressure was immediately put on the Scottish government and they have fully delivered changes. Kate Forbes stated that the SNP had “listened to calls to raise the starting threshold for LBTT to help stimulate the housing market and the economy”.
There is also highly encouraging news for first-time buyers as Forbes acknowledges the LBTT cut is “is a blanket measure and one which may not help first-time buyers”. As such she announced that the SNP will be committing an extra £50m to the first home fund, a shared equity scheme which allows first time buyers to effectively borrow up to £25,000 from the government to put toward their new home. The programme has been very popular since coming into place at the tail end of 2019, particularly with City Centre new build projects such as G3 Square by Drum Property and Strathcarron Homes City Garden Apartments development.
Discussing the importance of the temporary raise to the LBTT threshold, Corum’s Managing Partner, John Kelly, comments that “the move comes at just the right time; the Scottish property market was able to restart in earnest on June 29th and the bounce back has been fantastic to see, but we are conscious of the wider economic position, so moves such as a cut to LBTT will be important to keep the housing market buoyant”.
All in all the outlook for the Scottish property market is looking strong at this time; a rip-roaring restart to proceedings with hungry buyers has been greatly welcomed, and the number of sellers looking to take their homes to the open market is picking up momentum every day. The changes, albeit temporary ones, to LBTT will likely add to the kitty as our industry gets back to match sharpness.
