Dwelling tax and Stamp duty - Purchasing another property in Scotland

gymguy2017

I'm very grateful for advice of colleagues who understand the tax/situation of buying a property in Scotland.
I own a flat outright and let this out. I live with my partner in their flat; they are going to sell their flat. We are looking to buy a house (the mortgage for the house will be joint). 
I read that if I am on the joint mortgage for the house (which would be a second property for me, albeit that my first property is let out to other) I would pay 4% dwelling tax; does this mean 4% of the property value of the house we are going to buy? What happens with Stamp Duty?
Thanks for your advice.

davidmcn

LBTT (Land and Buildings Transaction Tax) is the only relevant tax in Scotland. Stamp Duty was replaced in 2003 with Stamp Duty Land Tax (SDLT) across the UK, and it was devolved in 2016 in Scotland when LBTT was introduced.
And yes, it's 4% additional LBTT on the price you pay for the new place - calculator is here:
https://www.revenue.scot/land-buildings-transaction-tax/tax-calculator/lbtt-property-transactions-calculator

gymguy2017

Thanks. If we both kept our flats and rented out and purchased a house, does that mean we would have to pay 8% additional LBTT on the price paid for the joint house (because we would both have a second property albeit jointly mortgaged)?

davidmcn

gymguy2017 said:

Thanks. If we both kept our flats and rented out and purchased a house, does that mean we would have to pay 8% additional LBTT on the price paid for the joint house (because we would both have a second property albeit jointly mortgaged)?

No, the ADS is only applied once.

[Deleted User]

gymguy2017 said:

I'm very grateful for advice of colleagues who understand the tax/situation of buying a property in Scotland.
I own a flat outright and let this out. I live with my partner in their flat; they are going to sell their flat. We are looking to buy a house (the mortgage for the house will be joint). 
I read that if I am on the joint mortgage for the house (which would be a second property for me, albeit that my first property is let out to other) I would pay 4% dwelling tax; does this mean 4% of the property value of the house we are going to buy? What happens with Stamp Duty?
Thanks for your advice.

As @davidmcn says it’s LBTT not stamp duty in Scotland. If your partner sells your current home and you jointly purchase a new home together the ADS of 4% will not be due. If however your partner decides to keep your current home to let and you jointly purchase a new home together the 4% ADS will apply. 

https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/lbtt10001-lbtt-additional-dwell-18

Engeroosi

Sorry for jumping on to this thread, however it is closely related to my quandary. 
I own the house that my partner and I live in, however, she plans to buy another property for her mother to live in. This will also give her daughter's a place in town to stay over on occasions. 
This would be my partners first property, Would she be liable to pay additional dwelling tax? Property price will be around 120k to 150k. 

[Deleted User]

Engeroosi said:

Sorry for jumping on to this thread, however it is closely related to my quandary. 
I own the house that my partner and I live in, however, she plans to buy another property for her mother to live in. This will also give her daughter's a place in town to stay over on occasions. 
This would be my partners first property, Would she be liable to pay additional dwelling tax? Property price will be around 120k to 150k. 

If you read the link I posted above then you will see that as you co-habit you will be treated as a single economic unit for the purposes of LBTT. Therefore your partner will be purchasing an additional dwelling so the additional dwelling supplement will apply. 

Engeroosi

Ok thanks for that, will know to prepare for that surcharge.