In the second of our four Finance Directors' Bitesize Briefings we looked at the changes to the Job Retention Scheme (CJRS), the potential tax changes that…
As part of the summer economic statement on 8 July 2020, Rishi Sunak announced changes to temporarily extend the 0% stamp duty land tax (SDLT) band on purchasing residential property (see my earlier blog here). These changes apply to SDLT only and relate to residential properties purchased in England and Northern Ireland.
The Welsh and Scottish governments have subsequently both announced their own changes to land transaction tax (LTT) and land & buildings transactions tax (LBTT) respectively. These changes are great news for most home buyers looking to move by 31 March 2021. Here are the headlines:
Wales – land transaction tax (LTT)
- Changes are being made to the LTT tax rates and thresholds that will become effective from 27 July 2020 to 31 March 2021
- The main rate zero rate threshold is being lifted to £250,000, removing their previous first tax band (which used to charge the band from £180,000 to £250,000 at 3.5%). This is expected to increase the proportion of homebuyers paying no LTT to around 80%
- Those buying homes costing more than £250,000, and liable to the main rates, will have a tax reduction of £2,450
- Unlike the changes to SDLT, the Welsh government has decided to make no changes to the rates and thresholds that apply to the higher rates residential property transactions
Scotland – land & buildings transactions tax (LBTT)
- Changes are being implemented in Scotland from 15 July 2020 and remain in place until 31 March 2021
- The threshold at which LBTT begins to be paid will raise from £145,000 to £250,000. It is estimated that 80% of home purchasers will pay no LBTT (excluding any additional dwelling supplement)
- Home movers buying a home costing more than £250,000 will save £2,100
- The rates for the additional dwelling supplement and non-residential rates remain unchanged
A First Home Fund has also been announced which is a shared equity scheme that can provide first-time buyers with up to £25,000 to help them buy a property in Scotland.