Cabinet Secretary for Finance, John Swinney, presented his draft budget for 2016/17 to his fellow MSPs in the Scottish Parliament today and unveiled his plans to introduce a 3% Land and Buildings Transaction Tax (LBTT) levy on the purchase of many second homes.
From April 2016 all second properties purchased for over £40,000 will be liable to this levy in addition to the LBTT charged on the property in the usual way.
This follows on from a similar announcement by the UK Chancellor George Osbourne in his autumn statement which imposed a 3% stamp duty surcharge on second and holiday homes in an effort to kick-start the property market for first time buyers by deterring landlords from buying up properties.
Mr Swinney told MSPs at Holyrood: “I am conscious of the issue of second homes.
“We need to ensure that the opportunities for first-time buyers to enter the market in Scotland are as strong as they possibly can be and we need to make certain that tax changes elsewhere in the United Kingdom do not make it harder for people to get on the property ladder.
“That is why I today announce my intention to introduce a supplement to LBTT for those purchasing an additional home for £40,000 or more.
“Such properties will be subject to a supplement of 3% of the total purchase price, payable in addition to the existing LBTT charge.”
LBTT replaced UK stamp duty in Scotland in April of this year.