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Scotland to Introduce New Stamp Duty System in 2015

A new stamp duty system is to be set up in April 2015 for residential properties in Scotland. In addition, a new body will be set up to collect the tax which will be based on a progressive calculation as opposed to the current flat rate system.

The bill, introduced under the Land and Building Transactions Act (Scotland), has been approved by politicians as they hope it will revitalise the Scottish housing market. There will now be a consultation in order to set the rates and bands of the new tax and these will be made available to the public in September 2014. It has been reported that homes sold for under £180,000 will likely not be subject to the new stamp duty but tax will be added at a stepped rate on those sold over this price. The current stamp duty rate applies to properties over the £125,000 mark and not to those sold under this price. The current stamp duty applies to the whole sum of the property’s value and applies to all property throughout the UK.

It is hoped that new buyers will receive better support if they want to step on the property ladder for the first time. As the tax paid is proportionate to the property’s value, it is thought that more individuals and families will be able to buy homes to better suit their needs. The government aims to make it clearer to property buyers how much tax they will pay in proportion to the value of their home.

The new bill is based on Scottish property law therefore it is thought that this will make it easier to understand and apply. The Law Society of Scotland have stated that timescales are tight in order to bring the bill into force and that they will need clarification on how the tax will be applied to partnerships. The Law Society has also stated that the development of an online collection system for the tax will be key to the success of the new legislation.

Additionally, the Law Society of Scotland have encouraged practitioners to work with the Scottish government to ensure that they are aware of what will and what will not work when it comes to the new tax. The aim is to introduce a stamp duty tax that is fair and easy to understand for taxpayers in Scotland.

Buying Houses since 1972