The Effect of LBTT on Residential Property Market in Aberdeen

The Effect of LBTT on Residential Property Market in Aberdeen Announced in the Autumn Statement in October 2014, the LBTT rates came into force in Scotland on 1st April, 2015. LBTT Rate Bandings Remainder of UK under SDLT On the first £145,000 of price No tax On first £125,000 of price No tax Above £145,000 - £250,000 (£105,000) 2% £125,000-£250,000 (£125,000) 2% Above £250,000 - £325,000 (£ 75,000) 5% £250,000-£925,000 (£675,000) 5% Above £325,000 - £750,000 (£425,000) 10% £925,000 - £1.5 mil. (£575,000) 10% Above £750,000 12% Above £1.5mil. 12% From ASPC figures: comparison between volume of sales within first quarter of 2014 and 2015 for the different bandings of LBTT show as follows:- 2014 2015 increase/decrease Up to £145,000 463 370 -93 £145,000 - £250,000 624 630 +6 £250,000 - £325,000 256 247 -9 £325,000 - £750,000 223 272 +49 £750,000+ 6 17 +11 Decrease in sales of properties up to £145K Substantial increase in the number of properties coming to market in the highest LBTT band. Compared to second quarter of 2014 and 2015 2014 2015 increase/decrease Up to £145,000 498 443 -55 £145,000 - £250,000 879 810 -69 £250,000 - £325,000 353 349 -4 £325,000 - £750,000 357 257 -100 £750,000+ 19 10 -9 Conversely the 2nd quarter shows a reduction over all the LBTT bandings on the previous year 1st Quarter 2015 2nd Quarter 2015 increase/decrease Up to £145,000 370 443 +73 £145,000 - £250,000 630 810 +180 £250,000 - £325,000 247 349 +102 £325,000 - £750,000 272 257 -15 £750,000+ 17 10 -7 Increase in 2nd quarter volume of sale in the price bandings where LBTT is cheaper Average Sale prices in Aberdeen City and most popular suburbs between 1/1/2015 and 5/10/2015 3 bed detached 3 bed non-detached Areas £ £ Aberdeen City 352,100 244,982 Bieldside 483,000 406,295 Bridge of Don 298,463 232,465 Bucksburn 330,000 205,165 Cults 448,408 245,000 Danestone 289,343 196,194 Kingswells 320,237 258,503 Milltimber 442,556 255,000 Peterculter 371,500 266,526 Westhill 318,223 243,754 5 of the 10 areas fall into the higher LBTT banding for 3 bed detached homes. Average Sale prices in Aberdeen City and most popular suburbs between 1/1/2015 and 5/10/2015: 4 bed detached 4 bed non-detached £ £ Aberdeen City 503,736 412,508 Bieldside 688,688 800,000 Bridge of Don 361,652 287,222 Bucksburn n/available 263,059 Cults 590,800 529,091 Danestone 389,000 n/available Kingswells 371,778 n/available Milltimber 418,333 366,667 Peterculter 485,000 317,500 Westhill 391,709 328,750 9 of the 10 areas fall into the higher of the LBTT bands for 4 bed detached 4 of the 10 areas fall into the higher of the LBTT bands for 4 bed non-detached Using a sample of the above property purchase prices LBTT payable SDLT payable Difference Purchase Price: £ £ £ £352,100 8,560.00 7,605.00 + £ 955.00 £406,295 13,979.00 10,314.00 + £ 3,665.00 £503,736 23,723.00 15,186.00 + £ 8,537.00 £800,000 54,350.00 30,000.00 + £24,350.00 Nicola W. Reid. [email protected] 01224 408408 Ledingham Chalmers LLP, Johnstone House, 52-54 Rose Street, Aberdeen. .

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