Scottish Budget 2024: Key updates to property tax you need to know

As local property experts, TSPC is committed to keeping buyers, sellers, and investors informed about the latest developments in the property market.

The recent Scottish Budget announcement has revealed several updates to Land and Buildings Transaction Tax (LBTT) and the Additional Dwelling Supplement (ADS) that may impact your property decisions. Here’s what you need to know:

Residential LBTT rates & bands

The Scottish Government has confirmed that residential LBTT rates and bands will remain unchanged. This decision ensures stability and certainty for taxpayers and maintains Scotland’s progressive tax system.

First-Time Buyer Relief continues

The First-Time Buyer Relief will remain in place, effectively increasing the nil rate band from £145,000 to £175,000. This means eligible first-time buyers can save up to £1,500 on the purchase of their first home.
Since its introduction, this relief has benefited over 80,000 first-time buyers, highlighting its importance in helping people take their first step onto the property ladder.

Non-residential LBTT rates unchanged

For those purchasing commercial or mixed-use properties, the non-residential LBTT rates and bands will also remain the same. Scotland continues to offer a competitive landscape for non-residential property transactions compared to other parts of the UK.

Changes to Additional Dwelling Supplement (ADS)

The Additional Dwelling Supplement (ADS), which applies to purchases of additional residential properties such as buy-to-let investments or holiday homes, has seen some significant changes:

• The rate increased from 6% to 8%, effective 5 December 2024.
• Transactions where legal missives were signed on or before 4 December 2024 will not be subject to the increased rate.
• This increase is forecasted to generate an additional £32m in revenue for 2025-26.

The Scottish Government has indicated that the higher ADS rate is designed to protect opportunities for first-time buyers by discouraging speculative purchases that could reduce housing availability.

What these changes mean for you

For buyers: If you’re a first-time buyer, the continuation of the LBTT relief continues to make entering the property market more affordable. However, if you’re considering purchasing an additional property, it’s worth factoring in the increased ADS rate if your transaction takes place after 5 December 2024.

For sellers: Stability in LBTT rates and bands helps ensure a predictable market, which is good news for property sellers.

For investors: The higher ADS rate could influence the financial viability of certain investment properties. It’s essential to plan ahead and seek expert advice.

TSPC is here to help

Navigating property tax changes can be complex, but you don’t have to do it alone. Whether you’re buying your first home, upgrading, or investing, TSPC is here to provide guidance tailored to your needs.

Feel free to reach out to us for expert advice and support as you plan your next property move.

Stay informed. Stay ahead. Choose TSPC.

Contact us today to discuss how these updates may impact your property plans.