Extend the 18 month reclaim period on ADS property tax

Currently, if someone buys a second property they pay extra tax, the Additional Dwelling Supplement (ADS). But if they move into the new house, and then sell the old property within 18 months they can claim this back.

https://www.revenue.scot/land-buildings-transaction-tax/guidance/lbtt-legislation-guidance/worked-examples-additional/exam-49

As the property market is shut, this 18 months period should be extended.

Why the contribution is important

People who had planned to move and sell may find it takes them longer to sell their old property than 18 months due the Corona Lockdown and restrictions on the housing market. This is not in any way their fault, but they may be left seriously out of pocket by not being able to reclaim the Tax. Extending the 18 month period would mean these people are not penalised for something they have no control over.

by J32451 on May 06, 2020 at 09:29PM

Current Rating

Average rating: 3.1
Based on: 6 votes

Comments

  • Posted by Vicster May 06, 2020 at 22:59

    I agree, this should be extended during the pandemic. My parents have purchased their retirement home but not sold their current home, meaning the clock is ticking on redeeming the tax. This is completely outwith their control as they can robustly sell/market their property due to no home viewings etc.

  • Posted by BUTEMACS May 06, 2020 at 23:52

    Agree!

  • Posted by DrT May 07, 2020 at 16:16

    I agree extending the period to sell a second property from 18 months should happen. The time to see the second property may take longer owing to the necessary restrictions imposed by the government. Those selling second homes may find their value drops considerably in the short term because of these restrictions, through no fault of their own. I have seen figures estimating that property values may fall by more than 16% in the short term. Those intending to sell their original homes in good faith within the 18 month timescale in order to reclaim ADS should not be financially penalised.

  • Posted by Obsidian May 08, 2020 at 09:05

    Extending the ADS reclaim period seems sensible and reasonable to account for the pause in the market.
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