With effect from 4 December 2014, the SDLT regime will change for residential properties. It has long been considered that the current system, which operates by applying a fixed percentage rate to the entire purchase price, is unfair and distorts the market with few properties being sold at values either side of the SDLT rate bands.
From 4 December 2014, SDLT liability will be arrived at by using progressive rates (in the same way that income tax is calculated). This is in line with the Land and Buildings Transactions Tax (LBTT) system, which will replace SDLT in Scotland from April next year. The new rates (set out below) will apply to residential purchases in Scotland until LBTT replaces SDLT.
There is a transitional period, which means that purchasers who have already exchanged contracts on or before 3 December 2014 will be able to choose whether to use the old or new SDLT regime when completing transactions on or after 4 December 2014.
The rates that will apply from 4 December 2014 are as follows:
We will update you as and when the draft legislation implementing the announced changes is published.
Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2014. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
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