Stamp duty 'holiday' will end as planned in March

The extended cut to stamp duty for house-buyers south of the border will not be replicated in Scotland, Finance Secretary Kate Forbes has confirmed.

While UK Chancellor Rishi Sunak used his Budget on Wednesday to announce continued relief for property purchases, Forbes said the temporary reduction to Land and Buildings Transaction Tax (LBTT) – the equivalent of stamp duty in Scotland – would still end in March.

That was despite the Chancellor saying the Scottish Government would get an additional £1.2bn as a result of his Budget.

But Forbes said part of that cash had already been accounted for – or “baked in” – to the spending plans she announced at the end of January in the Scottish budget.

As part of that, the Finance Secretary said she had made the “big commitment” to extend business rates relief for a full year – adding Sunak was only doing this for three months.

In Scotland, retail, hospitality, leisure and aviation businesses will pay no rates during 2021-22, Forbes has pledged, saying this had been the “number one ask from business”.

But when asked if she would replicate extended reductions in stamp duty, Forbes said in Scotland the changes would end, as planned, on March 31.

Last July, the Finance Secretary announced the threshold at which buyers must start to pay LBTT would increase from £145,000 to £250,000 – a move which she said at the time would mean 80% of buyers would not pay anything under the levy.

That was announced in the wake of a similar announcement from the UK Government.

And Sunak on Wednesday told MPs that the the stamp duty holiday, which had been due to end on March 31, would now remain in place until the end of June, with a “tapered” period running until September.

That will mean the current “nil rate” stamp duty band at £500,000 in England and Northern Ireland will remain in place until June 30.

Estate agents Rightmove estimated that about 300,000 transactions in England could benefit from that stamp duty extension, with buyers potentially saving an additional £1.75bn.

Asked about this on BCC Radio Scotland’s Good Morning Scotland, Ms Forbes said there were no plans to replicate the extension north of the border.

The Finance Secretary said: “We will stick to that original plan, that was set out clearly. It was intended to support the recovery of the residential property market this financial year, that has been achieved.”

She added: “The nil rate band was already lower in Scotland, and yet we have seen record high levels of transactions and house purchases, so it has achieved its purpose.

“But, ultimately, when it comes to tax policy, I have choices. The number one ask from business was to extend the 100% relief on non-domestic rates, that’s what I have done alongside freezing council tax to help households in need so those are our choices in taxation.”