Are you purchasing a property? Please note important changes to LBTT and ADS
Further to our recent news bulletin, published on 17th December, confirming that the Scottish Parliament were considering a change to the legislation surrounding Land and Buildings Transaction Tax (“LBTT”) and Additional Dwelling Supplement (“ADS”), we can confirm that the Scottish Parliament last night approved the Land and Buildings Transaction Tax (Tax rates and Bands etc) (Scotland) Amendment Order 2018.
The changes mean that (i) in respect of residential transactions the rate of ADS, if applicable, will increase from the current rate of 3% of the “relevant consideration” (usually the purchase price being paid) to 4%, (ii) the lower rate of non-residential LBTT” will be reduced from 3% to 1% of the “relevant consideration” (usually the purchase price being paid) and (iii) the upper rate increased from 4.5% to 5%. This is an important update for residential property purchasers who are liable to pay ADS in Scotland, and commercial property investors in Scotland, as they should be aware that their tax liability will be affected, should their purchase settle on or after 25th January 2019, provided the missives (contract) for their purchase was not concluded prior to 12th December 2018.
If you require advice on the purchase or sale of either residential or non-residential property, especially in light of these changes to ADS and LBTT, please do contact our team in Fort William on 01397 701000 or in Oban on 01631 562308.