Changes coming down the line to the tax payable on property purchases will have a knock on effect throughout the market.
On 16th December John Swinney the Scottish Finance Secretary announced that there will be a 3% tax surcharge applied to those buying a second home or a Buy-to-Let property valued in excess of £40, 000. This new tax will come into place on the 5th April 2016.
This is in addition to Land and Buildings Transaction Tax (LBTT) which came into play on 1st April 2015.
Rates of LBTT and 2nd Property Tax
|Bands||LBTT||If 2nd Property|
|Up to £40,000||0%||0%|
|£40,001 - £145,000||0%||3%|
|£145,001 - £250,000||2%||3%|
|£250,001 - £325,000||5%||3%|
|£325,001 - £750,000||10%||3%|
The Government has said that this additional tax is intended to help first time buyers get on the market, and to prevent buyers from the rest of the UK purchasing in Scotland in order to evade additional tax levies south of the border.
However those looking to purchase a second property will face a significant increase in their tax bill.
Whether buying or selling, this tax will have an impact on the amount of tax you pay, or the number of potential buyers out there for your property.
For more information on this tax, or for more information about your local property market, call 01334 475 151 for Fife, 0131 539 3333 for Edinburgh.