Wednesday, 26 June 2013
A 'Fairer' Property Tax
Yesterday MSPs voted to replace stamp duty for house sales with a Land and Building Transactions Tax (LBTT).
This is the first tax Bill in Scotland for over 300 years and he's picked a good one to overhaul. I've always thought the current system, the UK's Stamp Duty Land Tax (SDLT) was unfair because anyone paying more than £125,001 for a home immediately falls into the stamp duty bracket and has to pay on the full purchase price of the property.
For first time buyers paying between £125,001 and £250,000, 1% of the purchase price is a substantial sum to find. The percentages increase with the purchase price of the property.
The devil is in the detail of course, but I understand that under the new LBTT only the proportion of the price above the tax thresholds will be liable for the higher rate of tax. Unfortunately the rates and tax bands for the new system will not be announced until September next year, at the earliest.
This new system makes stamp duty fairer and will hopefully, as long as the bands reflect house prices throughout Scotland, help those trying to get a foot on the property ladder.
Scottish government ministers are hailing the move as historic. It will be if it makes this property tax fairer for all.