16 Dec 2022

Scottish Government 2023-24 Budget – Land and Buildings Transaction Tax (LBTT) changes for second homeowners

In a Scottish Government Budget yesterday which saw income tax rises for higher earners in a bid to increase the spend on health and social care in Scotland, we also saw an increase in LBTT rates for second homeowners. LBTT is payable when buying property or taking out a lease on a property in Scotland.

Whilst it was confirmed that there would be no changes to the main residential and non-residential LBTT rates and bands next year, it was announced that there would be an increase in the additional dwelling supplement from 4% to 6%.

This LBTT supplement is now double the equivalent 3% stamp duty land tax (SDLT) higher rate for additional dwellings applying to property transactions in England and Northern Ireland.

The new legislation to introduce this supplement increase will apply from today (16 December 2022) to prevent any forestalling, though transitional provisions will mean that purchasers who entered into contracts before today will not be subjected to these new increased rates.

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