FIRST-TIME buyers in Scotland have been handed a tax break of up to £600 – mirroring changes introduced down south.
Finance secretary Derek Mackay said 80 per cent of new buyers would now be exempt from Land and Buildings Transaction Tax (LBTT).
He introduced a tax relief on the first £175,000 of a property’s purchase price, expected to affect a third of Scotland’s 33,600 first-time buyers.
The move follows in the footsteps of UK Chancellor Philip Hammond, who announced a similar tax break on properties of up to £300,000 last month.
Presenting his Scottish Budget, Mr Mackay said: “We will also take steps to make home ownership a reality for more of our young people.
“To help achieve this I am introducing a new relief on Land and Building Transaction Tax for first time buyers up to £175,000.
“All first-time buyers will benefit from this, and as a result 80 per cent of first time buyers will be taken out of LBTT altogether.”
First Minister Nicola Sturgeon previously indicated a tax break on purchases of up to £175,000 would help an equivalent level of first time buyers in Scotland as the £300,000 figure would in England.
But critics branded the changes “disappointing” and called for LBTT to be overhauled amid claims the tax framework – which replaced stamp duty in 2015 – had damaged the property market.
Hew Edgar, policy manager at the Royal Institution of Chartered Surveyors, said there was a “chronic shortage of suitable accommodation across Scotland’s housing options”.
He said: “Once again, we call on Scottish Government to review the current LBTT as a priority going forward as this current framework is not only limiting market activity, but could ultimately bring the market to a standstill.”
Scottish Conservative housing spokesman Graham Simpson said: “The move to follow the UK Government’s lead in providing more help for first time buyers is welcome in itself.
“But Derek Mackay failed to address the key problem with LBTT in his budget.
“The industry itself has repeatedly said the rates are too high further up the market which is causing it to stagnate.
“That jams up the system for everyone else. There’s no use lending a hand to first-time buyers if the properties aren’t there for them to bid for.”
David Marshall, Operations Director with Warners Solicitors and Estate Agents, said anything which reduces the burden on first-time buyers was welcome, but raised concerns over the Government’s decision to delay bringing in the change until June.
He said: “The one thing that no market likes is a lack of clarity and the manner in which things have been announced could cause uncertainty for buyers and sellers alike.”
As well as providing a break for first-time buyers, Mr Mackay announced £756 million towards delivering 50,000 affordable homes by 2021 – part of a larger investment of more than £3 billion.
He also said the Government would establish a new £150m “Building Scotland Fund” to boost housebuilding and commercial property.
Meanwhile, it will “renew” its mission to address homelessness, investing the first £10m in a £50m fund devoted to tackling the issue.
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