First Time Buyer Relief
First Time Buyer’s Relief came into effect on 30th June 2018.
Alongside measures to increase housing supply, the Scottish Government are providing this further support to first time buyers in Scotland, helping make home ownership a reality.
What is the Relief?
The relief raises the zero tax threshold for first time buyers from £145,000 to £175,000 with an aim that around 80% of first time buyers in Scotland will pay no Land and Building Transaction Tax (LBTT). In addition, first time buyers buying a property over £175,000 will qualify for relief on the portion of the price below the same threshold. This means that all first time buyers who meet qualifying conditions will benefit from relief of up to £600.
What are the Relief Qualifying Conditions?
Each of the following qualifying conditions must be met for the relief to be available:
- the transaction is an acquisition of a major interest in land;
- the land consists entirely of residential property and includes a dwelling;
- the buyer is a first-time buyer who intends to occupy the dwelling as the buyer’s only or main residence;
- the transaction is not a linked transaction (for the exception to this rule see Revenue Scotland further guidance); and
- the transaction is not one to which Additional Dwelling Supplement (“ADS”) applies.
Where there is more than one buyer the relief will be available only if each buyer meets all the relevant criteria. If any of the buyers do not meet all the conditions then the relief will not be available.
Summary
The question will remain as to whether this new relief will help first time buyers and the wider housing market. It is clear that the Scottish Government are trying to assist and incentivise home ownership for first time buyers. However, it is not without its restrictions and buyers must ensure they meet the qualifying conditions before they can claim. Only time will tell as to what impact this relief will have.