The Scottish Government has agreed that purchasers of six or more residential properties in one transaction will not have to pay the new 3% LBTT supplement - a relief which Brodies and others have campaigned for. This is very good news for investors in residential property in Scotland and may even prove to be a more generous relief than is available from the SDLT 3% supplement in the rest of the UK.
The relief will be available to both individuals as well as corporate purchasers, but only if six or more properties are bought at once. If you buy five residential properties in one transaction and then buy another residential property at a later stage the supplement would apply to all of those purchases. So it would make more sense to buy all six residential properties at once.
The Scottish Government was responding to the Stage One Report from the Scottish Parliament Finance Committee on the proposed supplement which will be charged on the total price of a second home from 1 April 2016.
There will be no grace period for purchasers who find themselves with two homes when the sale of their current home is delayed or takes place after the purchase of the second home but the Scottish Government has undertaken to review this in October. There will be no special relief for purchases of purpose built student accommodation, though the relief for six or more residential properties will apply.
In addition the Scottish Government have confirmed that the 3% supplement will not apply to purchases where a contract was entered into before 28 January 2016, rather than 16 December as previously expected.
The Bill will now return to the Finance Committee for further scrutiny. The Scottish Government's response to the Finance Committee's report can be accessed by clicking here.
For more information please get in touch with your usual Brodies contact.