The Scottish property tax system is set to change significantly from 1 April 2015, with the introduction of a new Land and Buildings Transaction Tax (LBTT), which will replace the existing UK system in Scotland.
However, following the overhaul of stamp duty announced by Chancellor George Osborne in the 2014 Autumn Statement, which saw the introduction of new graduated rates, Mr Swinney announced that he would need to review the planned rates and bands for Scotland.
Previously, the threshold at which duty becomes payable in Scotland was to be set at £135,000 with effect from April. Rates were to range from a starting point of 2% up to 12% on the portion of any property costing more than £1m.
Following the review, the starting point for stamp duty in Scotland has now been raised to £145,000, while a 12% marginal rate will apply to properties costing more than £750,000, rather than £1m.
Commenting on the decision, Mr Swinney said, ‘This Government has put fairness, equity and the ability to pay at the very heart of the decisions that we have taken’.
However, MSP Jackie Baillie described the move as ‘the fastest U-turn in history’.
Chancellor George Osborne warned that the new powers being granted to Scotland could result in a UK-wide ‘tax competition’.
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