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In recent weeks the Scottish Government, the Law Society of Scotland, Registers of Scotland and other agencies have been working to bring in changes to existing practices to allow more flexibility in conveyancing procedures and the property market. A number of changes have been introduced which will be of benefit to some. They may not have a direct impact on everyone who has an interest in the property market at present, but nevertheless it is encouraging to see these developments.
One such change concerns the Additional Dwelling Supplement Tax (ADS) payable over and above the Land & Buildings Transaction Tax (LBTT), when purchasing a second house. This is charged at 4% of the price. If the purchaser sells their existing house within eighteen months of the date of completion of the purchase of their second house, the ADS tax can be reclaimed. The Scottish Government has announced an extension of this eighteen month period to thirty-six months. This recognises the current challenges in the property market and the difficulty faced by home owners who purchased a new home before selling their existing home and, due to the “stay at home” guidelines, are now struggling to sell within the eighteen month period. This extension to the period will apply when the purchase of the second house was completed between 24th September 2018 and 24th March 2020.
This may not directly affect the majority of those in the property market, but it is nevertheless an encouraging small step. Whether you are a new or existing client, contact our residential conveyancing team if you have any queries about your LBTT or ADS liability please contact Munro and Noble on 01463 221 727