A Race Against Time: Lands And Buildings Transaction Tax
11 months ago
The ‘LBTT Holiday’ was introduced by the Scottish Government on the 15th of July last year in an effort to kick start the property market in Scotland. It is safe to say that it has been a success, with significant rises in the number of house sales in recent months. The holiday raised the nil rate LBTT threshold from £145,000 to £250,000 meaning that purchasers of property valued under £250,000 pay no LBTT. Welcome news for all.
Public debate over the last few weeks, however, has started to bubble in anticipation with the holiday period scheduled to end on the 1st of April 2021. The Finance secretary, Kate Forbes confirmed as part of the Scottish Budget on the 28th of January that the threshold would indeed be restored to £145,000. Many are now calling for the deadline to be extended amid fears over a potential bottleneck of transactions all trying to complete before the end of March. There are a number of existing property transactions that are midway through the process but may not settle before the deadline. Like a nightmarish game of Countdown, purchasers look to the clock and to their solicitors who are desperately trying to solve the conundrum in time.
Mrs Sturgeon now faces a barrage of robust opposition from institutions such as The National Association of Estate Agents (NAEA) and Apropos Property Management Group. They argue that extending the deadline by six months would offer some much needed breathing space to a sector which is already under intense pressure. Extending the deadline beyond that of our southern neighbours may also serve to further strengthen the property market in Scotland, making it attractive to foreign people and businesses. David Alexander, the CEO of Apropos Property Management Group stated that “Scotland has been enjoying a boom in the property market since the lockdown began in March with average house prices rising by 6.8% between March and September from £151,285 to £161,510 which is much higher than the performance of the rest of the UK.”
Whatever decision is taken by the First Minister, thriving Scottish property sales will be hard for her to ignore. For property transactions to have continued in the manner that they have throughout a global pandemic is somewhat remarkable. In any event, the market remains healthy and people still appear eager to move.
If you’re interested in buying or selling your home, Rollos can guide you through the process and make your experience as stress free as possible.
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