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NGL Law Solicitors

NGL lawyers are based in Glasgow, Hamilton and East Kilbride in Scotland and have well over 50 years experience in the legal profession, offering a wide range of services and advice. To speak to our solicitors please telephone 01698 207050 today.

Land & Buildings Transactions Tax

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First time buyers boost 

Homebuyers in Scotland will pay no tax on properties costing less than £135,000, Finance Secretary John Swinney has announced. 

And a 12% marginal rate for houses costing more than £1m will come into force next April, when stamp duty is replaced in Scotland. 

Mr Swinney's plan came in his budget proposal for the year ahead. 

Under the government's new Land and Building Transactions Tax, a marginal tax of 2% would apply to the proportion of a transaction between £135,000 and £250,000, while a 10% rate will apply to those between £250,000 and £1m.

 Mr Swinney told MSPs: "As a result of the rates I have announced today, nobody will pay tax on the first £135,000 of their house purchase. 5,000 more transactions will be taken out of tax, supporting first-time buyers and those buying properties in the affordable market." 

Currently any property up to £125,000 does not involve any stamp duty payment. 

Stamp duty being a lump-sum tax (slab tax) that anyone buying a property costing more than a certain amount is required to pay. 

As of April 2015, that tax-free figure will rise to £135,000 for homebuyers in Scotland.

Buying a property costing up to £135,000 

If you were to buy a house today between those two figures, you would need to pay 1% stamp duty. 

So, a £130,000 purchase now, for example, would require a duty payment of £1,300. 

However, a £130,000 purchase next April won't require any tax payment. 

A property costing between £135,001 and £250,000 

A marginal tax of 2% will apply to properties within this price bracket. 

Therefore, for example, a house bought at £200,000 when these new tax rates arrive, would require a payment of £1,300 - that's 2% of £65,000 (Basically the difference between £200,000 and £135,000). 

Buy a house now at £200,000 and you're needing to pay 1% stamp duty, which would be £2,000. 

So, a house bought at £136,000 in April 2015 would require a one-off payment of £20. 

A house bought at £136,000 now would require a one-off payment of £1,360. 

Buying a property costing between £251,001 and £1,000,000 

There's a marginal tax of 10% across this entire price range, and there's a tipping point for when it doesn't work in your favour. 

That tipping point is £324,300. 

A property bought at £300,000 in 2015 would mean a £7,300 charge 0% of £135,000; 

2% of £115,000 

10% of £50,000. 

With stamp duty for a house at this price currently at 3%, the stamp duty payment would be £9,000. At £325,000, that's £9,800 to be paid in 2015, whereas now you'd pay £9,750. £700,000 would require a tax payment of £47,300, whereas now stamp duty would be £21,000. 

SO IF YOU WISH TO BUY PROPERTY OVER £325000, YOU SHOULD DO SO NOW AS THE MARKET MAY BE AWASH WITH PROSPECTIVE PURCHASERS ATTEMPTING TO BEAT THE FINANCE MINISTERS INCREASE. 

Please contact our legal team should you require further information in respect of the above or information in respect of our estate agency services.

NGL's lawyers are based in Glasgow, Hamilton and East Kilbride in Scotland and have well over 50 years experience in the legal profession, offering a wide range of services and advice. To speak to our solicitors please telephone 01698 207050 today.