Nil Rate Band

Nil Rate Band

The Scottish Government has confirmed that the temporary change to the residential LBTT nil-rate band introduced in July 2020 has now ended (31 March 2021).

For transactions with an effective date from 1 April 2021 onwards, the ceiling of the nil-rate band for residential LBTT has returned to £145,000. First-time buyers will continue to be able to claim the first-time buyer relief, which has the effect of raising the nil rate band to £175,000 and results in a reduction of tax of up to £600.

Please note: Information below relates to the temporary change in the nil rate band for LBTT residential property transactions, introduced by the Scottish Government on 15 July 2020, applicable for transactions with an effective date of between 15 July 2020 and 31 March 2021 (inclusive).

Under the 'The Land and Buildings Transaction Tax (Tax Rates and Tax Bands) (Scotland) Amendment (No.2) (Coronavirus) Order 2020' an increase in the nil rate band for LBTT residential property transactions was applicable during the period 15 July 2020 to 31 March 2021.

LBTT rates and bands for residential transactions with an effective date between 15 July 2020 and 31 March 2021 (inclusive).

 Purchase price

LBTT rate

 Up to £250,000

0%

 Above £250,000 to £325,000

5%

 Above £325,000 to £750,000

10%

 Over £750,000

12%

Residential transactions for consideration of £40,000 or more will still require to be notified to Revenue Scotland even if no tax is due.

Rates for the Additional Dwelling Supplement (ADS) and non-residential LBTT remain unchanged.

First-time Buyer Relief

During the period 15 July 2020 – 31 March 2021, the nil rate band threshold for LBTT for all residential transactions had been increased to £250,000. This temporary increase in the starting threshold was greater than that provided by the First-time Buyer Relief. First-time Buyer Relief would therefore have had no practical effect during the temporary period in which the £250,000 nil rate band threshold was in place. 

For transactions with an effective date before 15 July 2020 and on or after 1 April 2021, the availability of the relief will result in a reduction in tax of up to £600 for first-time buyers. 

General information

For more information and guidance see the following webpages:

Calculating Tax

Information on tax rates and bands

Making an online LBTT return

Help and support

If you have any questions, please contact the Revenue Scotland LBTT Team - by Secure Message within the SETS system, or email: lbtt@revenue.scot

 

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