Scottish Budget: No change to land and building transaction tax but hike for second homes

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on the Scottish Budget (announced today), with no change to land and building transaction tax but hike for second homes.

Key points from Budget:

• • There is no change to either the rates or bands of land and building transaction tax.
  • However, the additional dwelling supplement – the tax charge on second homes – rises from 4% to 6%.
  • There will be no limit on the council tax increases that local authorities can implement next year.
  • Benefits increase by 10.1% in line with UK government plans.
  • The Scottish Child Payment remains at £25 per week for each eligible child.

Helen Morrissey says:

“It was a day of high drama with the Scottish Budget postponed for thirty minutes while questions were asked about potential briefings to media. However, there was no such dramas for many would-be house movers, with no changes announced to either the rates or bands for land and building transaction tax.

“However, those looking to buy a second property or buy-to-let are not so lucky, with the additional dwelling supplement increasing from 4% to 6% from tomorrow. It’s an extra cost that could add thousands of pounds to a property purchase and, in these current tough times, it could be enough to put people off taking the plunge.

“Another potential concern for people with squeezed budgets was the announcement there would be no limit on council tax increases from next year. After being frozen for several years, this potentially paves the way for big increases which will batter people’s pockets further.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay