Question 1

Why do I need a solicitor?

Accepted Answer

You need to appoint a Scottish Solicitor firm when you purchase a property in Scotland.  Your solicitor will be able to give you a good understanding of the current market conditions, areas in which you could consider buying and they will eventually negotiate the purchase of a property on your behalf, to get the best possible deal for you.  This includes placing Notes of Interest and Offers on your behalf.

Question 2

What do Stewart Watt & Co require before placing an Offer?

Accepted Answer

Once you find a home you think you might buy, you need to speak to your solicitor.  We'll help you decide on how much to offer on the property based on market conditions and the latest sales in the area, as well as information contained in the Home Report.

Also, we'll want to present your Offer in the best light and will require Proof of Identity (Passport or Driver's Licence), Proof of Address (Council Tax Bill or Utility Bill dated within the last 3 months) along with proof and source of funds (Mortgage Agreement in Principle, Bank Statements etc).

Question 3

Understanding the Asking Price

Accepted Answer

There are a few of different ways to list properties for sale.  Homes marketed at a 'fixed price' and 'offers around' generally mean the seller is expecting closer to the price stated rather than much over that.

If the property is marketed as 'offers over', the seller will be hoping to achieve a price higher than the one stated.  If you have viewed an 'offers over' property that you like, you will most likely wish to contact us to place a Note of Interest for you with the seller's solicitor, which formally registers your interest in the property.

If one or more Notes of Interest are received, a closing date may be set.  All offers must be submitted by this day.  It's essentially a blind bid situation: you won't know what other people are bidding, or even if they're making an offer at all.  A seller doesn't have to set a closing date, however, and can choose to simply accept and offer which is submitted after the property comes to market.

Question 4

What is LBTT?

Accepted Answer

Land and Buildings Transactions Tax (LBTT) was introduced in April 2015 to replace UK Stamp Duty Land Tax here in Scotland.  The amount payable will depend on the purchase price.  We will work the amount out for you in our estimate based on your prospective purchase price when you request a purchase quotation from ourselves.

You can also use the online calculator at https://revenue.scot/calculate-tax/calculate-property-transactions (https://revenue.scot/calculate-tax/calculate-property-transactions)to calculate this for you.

Question 5

What is LBTT first time buyer relief?

Accepted Answer

LBTT first time buyer relief is now available to all first-time buyers who buy a home which they intend to occupy as their main residence. The relief is therefore only available for residential property transactions that meet the criteria.

By increasing the initial LBTT threshold for first time buyers to £175k, the Scottish Government predict the majority of first-time buyer transactions will attract no tax.

First time purchases above £175k will also benefit from the first-time buyers relief on the portion below the £175k threshold.

Stewart Watt & Co will include First Time Buyer relief in the estimate of fees and outlays if applicable.

First-time buyer definition
A first-time buyer is defined as an individual who does not currently own, or has owned, a property in Scotland the rest of the UK, or anywhere else in the World.
Joint purchasers
Where a property is being purchased jointly, both parties will need to meet the relevant criteria to qualify for LBTT first time buyer relief.
Inherited property
If an individual inherits property, or has property gifted to them, this will be taken into consideration when assessing previous ownership status.
Trustees and Executors
If someone owns as property as a Trustee or Executor, they are not considered to be an existing owner for the purpose of LBTT first time buyer relief.
Occupation as a main residence
First time buyers must be able to demonstrate that the property being purchased will be their main residence. Although it is not necessary to occupy the property immediately, the buyer must indicate a clear intention to do so in the future. This allows for renovation, structural or remedial work to be completed after purchase and before occupation.
LBTT first time buyer relief is not available when a property is purchased for a purpose other than as a main residence, for example as a buy to let investment.

Question 6

What is Additional Dwelling Supplement?

Accepted Answer

The additional dwelling supplement (ADS) was introduced in April 2016 and applies to all transactions involving the purchase of an additional residential dwelling over £40,000. Additional dwelling types include buy to let investments and second homes.  We will include ADS as part of our estimate of fees and outlays to you.

Replacing a Main Residence
Someone who is replacing their main residence can claim a refund of ADS if their old home is sold within 18 months of buying their new one. In this situation a refund claim should be submitted to the Tax Authority under section 107 of the Revenue Scotland and Tax Powers Act 2014.
Ownership of an existing property
The additional dwelling supplement will normally be charged if the purchaser of a new property already owns a dwelling, and the dwelling is not replacing their existing main residence. Dwellings outside Scotland are also to be counted when assessing previous ownership status.
Ownership of an existing dwelling is not to be counted if the value of the ownership interest is less than £40,000.
Joint purchases
The additional dwelling supplement will be applied to a transaction if any person in a Joint purchase already owns a property. Joint purchasers include Spouses, civil partners, cohabitants and children of these groups .
Purchases of 6 or more dwellings
Where six or more separate dwellings are the subject of a single transaction, those dwellings are treated as non-residential. In these cases the transaction is normally exempt from the additional dwelling supplement.

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