Does Scotland have first-time buyer relief under LBTT and how does it compare to England's SDLT relief?

Full answer

Scotland does offer first-time buyer relief under Land and Buildings Transaction Tax (LBTT), but it works differently from England's Stamp Duty Land Tax (SDLT) relief. The standard LBTT residential nil-rate band is £145,000; first-time buyer relief lifts the threshold at which you start paying to £175,000. The maximum saving is therefore £600 (2% of the £30,000 between £145,000 and £175,000). Above £175,000 a Scottish first-time buyer pays the normal LBTT rates: 2% on £145,001–£250,000, 5% on £250,001–£325,000, 10% on £325,001–£750,000 and 12% above. There is no upper purchase-price cap on claiming the relief in Scotland. England and Northern Ireland use SDLT, where first-time buyer relief is considerably more generous on value but capped on price. Eligible first-time buyers pay 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000. The relief disappears entirely if the price exceeds £500,000, in which case standard rates apply (0% to £125,000, 2% to £250,000, 5% to £925,000, and so on). The maximum SDLT first-time buyer saving is £8,750 on a £500,000 purchase. Worked comparison: on a £250,000 first home, an English first-time buyer pays £0 SDLT, while a Scottish first-time buyer pays 2% on £250,000 minus £175,000 — that is £1,500 — having used the £600 relief. So the same-priced property attracts more tax north of the border at typical price points. Wales has no equivalent first-time buyer relief under Land Transaction Tax (LTT); the LTT nil-rate band (currently £225,000) applies to everyone. In all three nations, relief is lost if any buyer has previously owned property anywhere in the world.

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