Stamp Duty changes could herald Land & Buildings Transaction Tax rethink, says Scottish tax body
The Chartered Institute of Taxation (CIOT) is warning that the chancellor’s proposed series of measures affecting Stamp Duty Land Tax on commercial and residential properties (SDLT) could prompt finance minister John Swinney to consider changes to the Scottish equivalent.
It says the announcement, which came during today’s (Wednesday, 16 March) Budget, could encourage Swinney to revise Scotland’s Land & Buildings Transaction Tax (LBTT) on commercial properties and the new LBTT additional dwellings supplement.
George Osborne’s new commercial property measures, which come into effect from midnight, include a 0% rate on purchases up to £150,000; 2% on the next £100,000 and a 5% top rate above £250,000. There will also be a new 2% rate for high-value leases with net present value above £5 million.
From 1 April, there will be higher rates of SDLT payable on purchases of residential properties, similar to the LBTT additional dwellings supplement, which also takes effect from the start of April 2016.
Chair of the CIOT’s Scottish Technical Committee Moira Kelly said: “The changes announced today to the SDLT may encourage the Finance Minister, John Swinney, to consider changes to the LBTT here in Scotland. We wait with interest to see what exactly these changes will be.
“Insofar as additional residential properties are concerned, a higher rate of 3% above the current SDLT rate was proposed on additional properties in England, Wales and Northern Ireland in the Autumn Statement.
“We are pleased that the Government has decided to extend from 18 to 36 months, the period of time they have to claim a refund from the higher rates or before the higher rates will apply, in the event that there is a period of overlap in ownership of a main residence.
“The receipts will then be used to fund community-led housing developments. We call on the Scottish Government to consider making a similar relaxation in respect of the LBTT additional dwellings supplement.
“In addition, now that the UK Chancellor has decided to extend the additional tax to large scale investors, it remains to be seen whether in time the same extension will be made in Scotland.”