Councils to be exempt from property transaction tax

Councils in Scotland will be exempt from land and buildings transaction tax (LBTT) levied against affordable housing purchases under new Scottish Government plans.

A consultation launched on Wednesday reveals proposals to offer relief to councils on LBTT and the additional dwelling supplement (ADS) levied against those who own more than one home.

The changes to tax policy would also provide longer for someone to offload a previous home when moving and claim back the ADS paid, and an exemption for those who buy a new home after a divorce but are ordered to keep the original home by a court.

Public finance minister Tom Arthur said: “The additional dwelling supplement is an important part of the Scottish Government’s fair and progressive approach to tax.

“It supports our ambition to protect housing opportunities for first-time buyers by making it more expensive for those people who wish to buy additional dwellings like second homes or buy-to-let properties.

“While the ADS operates well in the majority of cases, there are some circumstances where it could work better.

“These proposed amendments are intended to address a number of concerns which have been expressed and improve fairness.

“In particular, removing the requirement for councils to pay the tax on properties bought for affordable housing will help ensure our wider housing policy aims are met and support the availability of affordable housing across Scotland.

“The measures in this consultation are wide-ranging and I encourage anyone with an interest to give us their feedback on the plans. We will consider all responses carefully before setting out our next steps.”

The consultation will close on April 5.