LBTT supplement bill passed

Legislation to introduce a 3% supplement on Land and Buildings Transaction Tax (LBTT) for purchases of additional residential property has now been passed by the Scottish Parliament.

The supplement will apply to purchases of additional residential properties (other than one which is intended to be the buyer’s main residence and is replacing their former main residence) which conclude on or after 1st April 2016.

SAL campaigned against the supplement and called for a number of exemptions in written and oral evidence given before the Scottish Parliament’s finance committee. We were successful in achieving an exemption for large scale transactions of 6 or more properties – this will reduce the restructuring costs of those who decide to operate their portfolios through a company to avoid the changes to finance interest relief which will be coming in from 2017.

A similar exemption was not approved by the UK Parliament for their corresponding Stamp Duty Land Tax (SDLT) supplement, so this will give investors and larger scale landlords in Scotland an advantage over their counterparts south of the border.