Coronavirus: Tax cut announced for Scottish home buyers
- Published
Scottish Finance Secretary Kate Forbes has announced a temporary cut to the transaction tax on house sales and extra support for first-time buyers.
The starting point for land and buildings transaction tax (LBTT) is to rise from £145,000 to £250,000.
Ms Forbes said this meant eight out of 10 house sales in Scotland would be exempt from the tax.
The move follows in the footsteps of a stamp duty holiday on transactions in England and Northern Ireland.
The change will not come into force immediately for "administrative reasons", although Ms Forbes said it would be implemented "as soon as possible".
The government is also to spend an extra £50m on the "first home fund" scheme which helps first-time buyers with their purchases.
Chancellor Rishi Sunak announced a stamp duty holiday on transactions in England and Northern Ireland of up to £500,000 as part of his summer statement of measures to respond to the coronavirus crisis on Wednesday.
Several of the major reforms announced - such as a VAT cut for the hospitality industry and funding to encourage firms to keep furloughed staff on - apply UK-wide.
However, housing and residential taxes are devolved to Holyrood, meaning there were calls for Ms Forbes to mirror the stamp duty cut in its Scottish equivalent, LBTT.
Kate Forbes said extra cash would be spent supporting first-time buyers
The finance secretary said she had listened to calls to "raise the starting threshold for LBTT to help stimulate the housing market and the economy", and said she would be taking "a distinctive approach" targeting first-time buyers.
The threshold where the tax kicks in will be raised from £145,000 to £250,000 - although this will not apply to second homes.
Ms Forbes said: "That means eight out of 10 people purchasing a home in Scotland will be taken out of LBTT, and all home movers purchasing a home above £250,000 will be £2,100 better off.
"This is a blanket measure and one which may not help first-time buyers, so I am announcing further targeted support for those who may be most concerned about making such an investment at this time."
Ms Forbes committed an extra £50m to the first home fund, a "shared equity" scheme which allows first-time buyers to effectively borrow money from the government interest-free.
And she said another £100m would be spent on "targeted employment support and training to keep people in work or help them retrain".
It is not yet clear when the change will come into force, with Ms Forbes saying time is needed to draw up legislation and for Revenue Scotland to be ready to manage the tax.
The Scottish Conservatives said there "remains a significant disparity" between the scale of the cuts announced by Mr Sunak and Ms Forbes, saying the delay in implementing the LBTT changes would be an incentive for people to delay purchases.
The Scottish Greens, meanwhile, said "this tax cut is likely to immediately push house prices up, wiping out any savings".