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Murray Beith Murray is a leading Scottish private client law firm.

For over 170 years we have specialised in meeting the legal, financial and administrative needs of individuals and families, family trusts, charities and private companies.

Call us today on 0131 225 1200
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Impact of the Additional Dwelling Supplement

In April 2016 the Scottish Government introduced a Land and Buildings Transaction Tax (LBTT) supplement on the purchase of additional residential properties in Scotland.  andrewstephen

This Additional Dwelling Supplement amounts to 3% of the total purchase price of an additional residential property that is purchased at a cost of £40,000 or more. Where applicable, it is payable in addition to the LBTT that would be due on the purchase.

According to the Scottish Government, the tax was introduced in response to news that the UK Government was to introduce a new Stamp Duty Land Tax supplement on the purchase of additional residential properties in the rest of the UK.

The Scottish Government was concerned that if it didn’t follow suit it might become more attractive to invest in additional residential properties in Scotland compared to the rest of the UK, particularly at the lower end of the market, which might make it difficult for first-time buyers in Scotland to get onto the property ladder.

The supplement’s introduction was controversial, with some commentators warning that if potential buy-to-let investors are deterred from buying additional properties it will lead to a reduction in the number of properties available to rent.

These fears appear to have been justified to some extent, with a poll conducted at the end of last year revealing that around 60% of respondents have been put off purchasing additional properties because of the Additional Dwelling Supplement, reports the Herald.

A lack of affordable housing and a shortage of social housing mean that many people are reliant on the private rental market to find a home. Any reduction in the number of properties available to rent could therefore be problematic, and a greater emphasis on building more affordable housing will be needed to make up any shortfall.

Residential Property Solicitors, Edinburgh

At Murray Beith Murray, we are more than just lawyers - we are trusted advisors. We provide a personal, attentive service aimed at making your property transaction run as smoothly as possible. For more information, please contact us today.

Contains public sector information licensed under the Open Government Licence v3.0.

Caution Recommended in HMRC Interactions
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