The Scottish Government Budget 2023–2024, presented by Deputy First Minister John Swinney, MSP, proposes changes to various devolved taxes to raise additional funds and deliver an increase of £1 billion to support Scotland's NHS and other public services.
In order to earn £34 million and create possibilities for first-time purchasers, the Scottish Government has increased the Land and Buildings Transaction Tax (LBTT) from 4% to 6% on extra properties.
The starting, basic, and higher rate income tax exemption amounts will be maintained. However, the higher top rate tax will go up by 1p while the top rate threshold will be lowered to £125,140 (formerly £150,000). This will raise £129 million, according to the Scottish Fiscal Commission (SFC).
There will still be access to the First-Time Buyer Relief. Due to this, the zero rate bracket for first-time purchasers has increased from £145,000 to £175,000 in effect. More than 48,000 first-time purchasers have benefited from the exemption between its commencement and the end of September 2022, avoiding up to £600 in taxes on their first-time home purchases.
Based on rental values as of 1 April 2022, the subsequent revaluation of non-domestic property will go into effect on that day (1 April 2023).
Basic Property Rates will be frozen at 2022–2023 levels. Compared to inflation hikes, this is predicted to save business tax rate payers £308 million. Additionally, the Higher Property Rate's applicable rateable value threshold will increase from £95,000 to £100,000.
100,000 properties will have all their rates waived thanks to the Scottish Government's reform and expansion of the Small Business Bonus Scheme (SBBS). Properties whose rate liabilities increase will do so gradually, thanks to transitional reliefs.