Additional Dwelling Supplement - change proposals: consultation analysis and Scottish Government response

3. Summary of Amendments

The Scottish Government intends to provide for the following amendments to the Land and Buildings Transaction Tax (Scotland) Act 2013:

3.1 Extend the relevant timelines from 18 to 36 months, namely:

• The time available to purchase a new main residence after disposing of a previous main residence.
• The time available to dispose of a previous main residence after purchasing a new main residence, and therefore claim a repayment of the ADS.
• The time period for considering whether a property was a buyer's only or main residence in the period prior to the purchase of a new main residence.

3.2 That a property inherited in the period between the conclusion of missives on, and the purchase of, a new main residence is disregarded for the purposes of the ADS, and to clarify the point in time at which an inherited property is owned.

3.3 In the context of deemed ownership provisions, that property shares are disregarded for ADS purposes where the relevant taxpayer's share value is less than £40,000.

3.4 Provide relief from the ADS on the purchase of a main residence where an interest in a previous main residence (PMR) is required to be retained by court order.

3.5 Introduce amendments to the joint buyer and economic unit provisions which seek to achieve the following:

• Where a main residence is purchased jointly, and only one buyer can meet the relevant conditions (disposal of a PMR that was their only main residence) and no additional relevant properties are held, both buyers are treated as meeting the repayment conditions.
• Disposals of a PMR in the 36 months prior to the purchase of a new main residence may be considered in determining if the ADS is repayable.
• The disposal of a property in which a buyer is deemed to have an interest, by virtue of the economic unit provisions, is to be treated as a disposal by the buyer.

3.6 Provide relief for local authorities from LBTT and ADS where the purchase relates to activities carried out under the powers conferred by Section 2 of the Housing (Scotland) Act 1987, and/or is funded under Section 2 of the Housing (Scotland) Act 1988.