Edinburgh home-buyers pay majority of property tax in Scotland

New data published by Revenue Scotland shows that nearly a third of all Land and Building Transaction Tax (LBTT) payments are made by Edinburgh home-buyers. To put this into perspective, no other council area pays more than 9% of the total. 

LBTT replaced UK Stamp Duty in April 2015 and its rates are set by the Scottish Government. For the tax to apply there is a minimum threshold of £145,000 in place, which more than half of home sales in Scotland fall below. However, home-buyers in Edinburgh are paying more tax as quite simply it has more expensive properties which are subject to greater levels of tax payments. This is emphasised by the latest figures published by Revenue Scotland, which state that properties in Scotland that sell for more than £325,000 account for only 8% of transactions, but makes up 55% of all LBTT revenue. 

Further to this, in April 2016, a new LBTT supplement was introduced known as Additional Dwelling Supplement (ADS). ADS is 3% of the total purchase price of an additional residential property purchase that is over £40,000. In the last financial year this raised £122 million, with Edinburgh home-owners once again paying more than any other council area at 23%. Following the 2019/20 draft Scottish Budget, this supplement is set to rise from 3% to 4%. The final vote on the Budget is expected to take place in February, therefore Edinburgh home-owners will find themselves paying even more tax for the purchase of an additional property.

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