The Scottish Government's proposal that purchasers of second homes should pay an additional LBTT charge of 3% of the total price of a second home was considered by the Parliament's Finance Committee this week.

The Finance Committee's Stage One Report, published today, makes a number of recommendations for amendments to the Bill. It recommends the inclusion of a relief for the bulk purchase of six or more properties in one transaction or in phased transactions in the same development as suggested by Brodies and others in response to the Committee's consultation on the proposed charge. The Committee also recommends that the Bill should provide for a relief for RSLs, local authorities and student accommodation.

The Committee does not support a relief for all new build properties but has recommended that any bulk purchase relief may have to be reviewed if there is evidence of a negative impact on the number of new housing developments due to a drop off in buy to let purchases off-plan by smaller investors.

The UK Government has been consulting on a similar 3% supplement for SDLT for properties in England and Wales. There are some differences in approach, for example the SDLT supplement is not expected to apply to the mixed purchases of residential and non-residential property and the SDLTconsultation document included a proposed relief for the purchase of 15 or more residential properties. The UK Government is currently considering the responses to the consultation.

It is planned to introduce the LBTT supplement on 1 April this year but there is still a way to go before the Bill is finalised and passed. The Government has in recent weeks shown itself willing to reject recommendations of the Finance Committee so we will be following the Stage One debate in the Scottish Parliament on 23 February at which the Committee's recommendations will be considered. The plan is that the Bill will then go through Stages Two and Three and be passed by 23 March.

We will continue to monitor and update you on the developments in the Bill. Click here to read the Stage One Report.

For further information please get in touch with Johane Murray, or your usual Brodies contact.


Johane Murray

Head of Real Estate & Partner