Buying property is always complicated, but now you must think about the different taxes you will pay on the purchase of properties located in Wales, Scotland, or the rest of the UK.
In Wales, you will pay Land Transaction Tax (LTT), which starts at 3.5% for residential properties costing over £180,000 and has a top rate of 12% on the portion of the property price which exceeds £1.5 million.
In England or Northern Ireland you will pay Stamp Duty Land Tax (SDLT). This starts at 2% for residential properties worth over £125,000, with a top rate of 12% on properties acquired for £1.5 million or more. However, first time buyers can benefit from a 0% rate on the first £300,000 for properties costing no more than £500,000.
In Scotland, Land and Buildings Transaction Tax (LBTT) starts at 2% for residential properties costing over £145,000. However, first time buyers are charged 0% on the first £175,000, with no upper limit on the property value.
All three countries have imposed a 3% supplementary charge on the value of residential property purchased by a company or as a second home, where the value of the property exceeds £40,000. However, Scotland is planning to increase this supplementary charge to 4% from 25 January 2019. The detailed rules for the supplementary charge differ in each country.
Action Point!
Check the taxes to be payable on purchase before exchanging contracts to buy property.
