Second home tax could spark Fife rush to buy
Thursday, 28 January 2016
A hike in the tax payable on second property purchases could spark a rush to buy in the popular East Neuk of Fife.
The area has long attracted those seeking a holiday home or property to let, lured by the beautiful beaches, tranquil atmosphere and pretty seaside villages.
And property expert Linda Black predicts the Fife haven could become even more attractive to househunters over the next couple of months as prospective buyers bid to move swiftly to beat the new rules due to come into force on April 5.
Linda, Head of Property Sales Fife for leading legal company Pagan Osborne, says the number of properties for sale is buoyant for the start of the year and more and more potential sellers are looking to put their homes on the market now. It’s a situation similar to the upsurge in sales in Scotland a year ago in advance of the new Land and Buildings Transaction Tax (LBTT) which replaced Stamp Duty and saw a jump in the tax on properties costing £325,000 upwards.
It has now been followed by the Scottish Government’s decision to follow Westminster by imposing an additional tax for those buying second homes, adding another three per cent on all such purchases over £40,000.
“The market did see a flurry of people buying higher-end properties a year ago to avoid incurring the extra LBTT and there is every possibility that a similar rush will be experienced in the run-up to the new second property surcharge,” said Linda.
“Fife and the East Neuk in particular are always sought-after areas because of the number of picturesque coastal communities such as Crail, Elie, Earlsferry and Anstruther, Cellardyke, St Monans and Pittenweem. Prices too are reasonable, offering many people an opportunity to purchase a get-away-from-it-all bolthole or invest in a buy-to-let property.”
But she warns sellers, who are hoping their homes will be a more attractive purchase before the new levy, that they will have to act quickly, as will prospective buyers wishing to avoid a significant increase in their tax bill: “We are seeing an increase in those considering selling now rather than waiting until the traditional springtime market but there is a short window of opportunity for those selling or buying to beat the tax on a property that might be being used as a second home.
“And whether buying or selling, this levy will have an impact on the amount of tax you pay, or the number of potential buyers out there for your property.”
For more information visit www.paganosborne.com.