Rossles Posted June 22, 2022 Share Posted June 22, 2022 Hi all Scottish self builders, I am in the planning process of a self build project, plot is north of Inverness. Architect is currently finalizing detailed drawings to submit for building warrant. I am keen to know from other self builders, how much Tax I will be liable to pay - both Second home Tax and / or Stamp duty? I am planning on keeping my current property. Really can't find much information online. I'm sure a mortgage advisor will put me right but thought I would ask here. I am also interested in who knows what the average cost estimate is per m2 in the North east currently?I am building a 1.5 storey +- 250 m2. Any knowledge or advice would be warmly welcomed. Link to comment Share on other sites More sharing options...
ProDave Posted June 22, 2022 Share Posted June 22, 2022 You pay stamp duty (I forget the current name for it) on the purchase price. North of Inverness i would expect a plot to be less than the threshold for paying any. Link to comment Share on other sites More sharing options...
JohnMo Posted June 22, 2022 Share Posted June 22, 2022 As the house doesn't exist until it has a completion cert, it is not a second home, it just a piece of land. Not sure what happens when it gets a completion cert, as you are not purchasing and that is when the second home tax gets charged. So not likely to be due a tax charge then either. You may have to or likely to, have to pay stamp duty on the profit made on any sale, as you have not lived in it, if you sell when completed. Way to many variables to give an average price, depends on build spec, how it's being built and by whom. What mine cost near Elgin, on a complex hill site, very well insulated etc, but with lots of my labour will not be reflective. Link to comment Share on other sites More sharing options...
ProDave Posted June 22, 2022 Share Posted June 22, 2022 We did not pay any land tax on our plot or when it was completed, and I would not expect to if we sold it. We will however be laiable for some capital gains tax when we sell our old house as we have not lived there for 5 years. Link to comment Share on other sites More sharing options...
SuperJohnG Posted June 22, 2022 Share Posted June 22, 2022 1 hour ago, ProDave said: capital gains tax Only on the amount over you originally paid though. Link to comment Share on other sites More sharing options...
andyscotland Posted June 22, 2022 Share Posted June 22, 2022 The Scottish equivalent of Stamp Duty & second home tax is the Land and Buildings Transaction Tax and the Additional Dwelling Supplement. https://www.gov.scot/policies/taxes/land-and-buildings-transaction-tax/ LBTT applies to all land and property but only to transactions e.g. change of ownership. The Additional Dwelling Supplement applies only if you are buying a "dwelling" - it does not apply if you are buying an empty plot, even if it has planning permission https://revenue.scot/taxes/land-buildings-transaction-tax/lbtt-legislation-guidance/additional-dwelling-supplement-ads-technical/ads-legislation-key-terms#LBTT10015 - NB it might apply if the plot has a building to be demolished/refurbished, and costs more than £40k. If you already own the plot, building a house on it that you will also own is not a "land transaction" so there is no LBTT or ADS. The only tax that will trigger when you build the house is council tax. As others have said there may also be CGT when you eventually sell either your existing or new property, depending which has been your main home. You will be able to offset most of the cost of building the house as well as the original plot purchase, so you're only paying tax on your "profit". It would be worth keeping good records of your build costs so you have evidence for CGT deductions later. Assuming the rules don't change, you will not pay any LBTT if/when you sell either : it is paid by the buyer. Disclaimer: I'm not a lawyer or an accountant! 1 1 Link to comment Share on other sites More sharing options...
Joe-90 Posted June 27, 2022 Share Posted June 27, 2022 Big thanks for providing this post and link saved us thousands as our solicitor was demanding we paid the tax on our plot until I sent them the link you provided. thank you 1 Link to comment Share on other sites More sharing options...
andyscotland Posted June 27, 2022 Share Posted June 27, 2022 Wow! Link to comment Share on other sites More sharing options...
Jilly Posted July 28, 2022 Share Posted July 28, 2022 Don't forget to check the Vat situation. Link to comment Share on other sites More sharing options...
Kelvin Posted July 28, 2022 Share Posted July 28, 2022 On 27/06/2022 at 20:36, andyscotland said: Wow! Wow indeed. Although we looked into this last year when buying our plot and considered buying a house too and my solicitor was very non committal. I found the same info posted above Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now