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Extra 3% surcharge on second homes and buy-to-let property annouced

In his Scottish Budget today Finance Secretary John Swinney MSP announced a new 3% Land and Buildings Transaction Tax levy on the purchase of many second homes with effect from April 2016.

Commenting on the announcement Bob Cherry, partner and head of lettings at CKD Galbraith, said:

Today's announcement regarding the introduction of a three percent surcharge on the full purchase price of all additional property from April next year will undoubtedly lead to a flurry of second home purchases and buy to let property sales before the end of March to beat the deadline.

This new levy will have implications for current landlords looking to sell as well as act as yet  another deterrent to would be landlords thinking about the market as an investment opportunity. This measure, like the LBTT rises introduced earlier this year, is also a wealth tax on owners as buyers of buy to lets will seek to pass on the extra purchase costs by reducing the price they are prepared to pay.