First-time buyer relief: a Revenue Scotland update

Revenue Scotland has updated its guidance, systems and processes to allow first-time buyer relief to be claimed from 30 June 2018. The updates follow the changes to the Land and Buildings Transaction Tax (Scotland) Act 2013 introduced by the Land and Buildings Transaction Tax (First-Time Buyer Relief) (Scotland) Order 2018, which came into effect from 30 June 2018.

The Order introduces tax relief for a first-time buyer acquiring ownership of a dwelling, provided certain conditions are met. The conditions are set out in the legislation and further explained in Revenue Scotland’s guidance, which is available with other supporting information about the relief from www.revenue.scot

The relief only applies to transactions where the contract is entered into on or after 9 February 2018 and the effective date of the transaction is on or after 30 June 2018. It is therefore not available for any transactions with an effective date prior to 30 June 2018.

Where due, the relief effectively raises the zero tax threshold for first-time buyers from £145,000 to £175,000. In addition, first-time buyers buying a property above £175,000 will qualify for relief on the portion of the price below the same threshold. This means that all first-time buyers who meet the qualifying conditions will benefit from relief of up to £600.

Revenue Scotland has updated its LBTT tax return form – available online and in paper form – to enable the relief to be claimed when a return is submitted. In addition, guidance and a tax calculator have been published to help anyone seeking information about the relief and how to claim it.

Chris Myerscough, Revenue Scotland head of tax, said they would welcome feedback from users of the guidance and the SETS system to enable future improvements.

Further legislative changes which came into force in June 2018 were amendments to group relief (read more here), and the LBTT (Relief from Additional Amount) (Scotland) Act 2018, under which certain eligible taxpayers may now be able to make a retrospective claim on ADS tax already paid where the transaction involves family units. Information about who might be eligible and how to claim repayment is available on Revenue Scotland’s LBTT Updates web pages.