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The Land and Building Transaction Tax will replace UK Stamp Duty in Scotland Credit: PA

The basics: Today, John Swinney announced changes to the rates in his proposed Land and Building Transaction tax .

This tax will replace Stamp Duty in Scotland from April 1 and the plans were first announced in October.

Why the changes? John Swinney changed the details outlined for the tax after George Osborne's autumn statement.

The Chancellor's plans left people buying property at the higher end of the market in Scotland paying much more than their counterparts in England.

So what do the changes mean?

The new tax will be different from stamp duty in that:

  • Scotland will have a higher threshold before tax is paid. Under UK Stamp Duty, the threshold is £125,000. However, under Mr Swinney's new proposals, the threshold in Scotland will be £145,000
  • Buyers at the top end of the market will still pay more than those in England. Properties in Scotland over £750,000 will face the the top rate of tax - 12%. In England, this rate only applies to properties over £1.5 million.

It will be different than the plans proposed in October:

  • The rate of tax proposed for properties worth between £250,000 and £350,000 has reduced. Under October proposals, the rate was 10%. Under the rates announced today, this has halved to 5%.

New rates for property tax announced

Mr Swinney announced the changes during a Budget Bill Debate Credit: David Cheskin/PA Wire

Today, the Scottish Finance Secretary John Swinney announced new rates for property tax in Scotland.

The new rates will form the Land and Building Transaction Tax that will replace Stamp Duty from April 1.

They are as follows:

  • No tax up to £145, 000
  • 2% from £145,000 - £250, 000
  • 5 % from £250,000 - £325, 000
  • 10% from £325,000 - £750,000
  • 12% from £750,000 plus

These are marginal rates and only the proportion of the price above each threshold will be taxed at the next rate.

According to Mr Swinney, 90 percent of transactions in Scotland - which all fall in brackets below £330,000 - will either pay less tax on their new homes, or the same as they would under current rates of UK Stamp Duty.

The changes have come in response to an overhaul of the UK stamp duty system announced by Chancellor George Osborne in his Autumn Statement.

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Finance Secretary to announce changes to Scottish stamp duty plans

Finance Secretary John Swinney will announce to the proposed new tax rates today Credit: David Cheskin/PA Wire

Finance Secretary John Swinney will announce changes to the proposed new tax rates for buying a home when the Budget is debated at Holyrood today.

Mr Swinney announced at the weekend that he would reconsider the bands and rates for the new devolved Land and Buildings Transaction Tax (LBTT) set out in October's draft 2015-16 Budget.

The levy will replace stamp duty in Scotland from April.

It has been branded a "tax on aspiration" by the Conservatives who have criticised it for imposing higher rates on properties at the top end of the market.

They wants to see the proposed 10% rate on homes between £250,000 and £500,000 halved as they claim it will hit middle-income families.

The review follows an overhaul of the UK stamp duty system announced by Chancellor George Osborne in his Autumn Statement Credit: PA

Mr Swinney's review follows an overhaul of the UK stamp duty system announced by Chancellor George Osborne in his Autumn Statement.

The Finance Secretary said that at the time of his original proposals, 90% of homebuyers would have been better or no worse off in the new Scottish system, but this has now dropped to 80%.

Under the current plans, someone buying a home worth £350,000 would pay £12,300 under LBTT, compared with £7,500 under the stamp duty system.

Mr Swinney will announce the conclusions of his review to MSPs at the Scottish Parliament before a Stage 1 debate on the Budget Bill.

Speaking ahead of the debate, he also reaffirmed the Scottish Government's commitment to increased funding of the NHS.

"Spending on Scotland's health service will increase in real terms next year, taking Scottish health spending above #12 billion for the first time. "The overall increase of #380 million in health resource spending will take the total health budget to record levels.

"The Scottish Government's commitment to increase the NHS budget demonstrates a continuing commitment to protecting the health service, and keep it in public hands."

– John Swinney, Scottish Finance Secretary
Will Rennie will use the debate to call for the NHS, mental health, Childcare and colleges to be put at the heart of the budget Credit: Danny Lawson/PA Wire

Liberal Democrat leader Willie Rennie will use the debate to call for the NHS, mental health, childcare and colleges to be put at the heart of the Budget.

He has written to Mr Swinney setting out the party's proposals, which include emergency funding for the NHS, equal treatment of mental and physical health and extending free childcare provision to more two-year-olds.

The party also wants "fairer" funding for colleges and for the threshold for the repayment of student loans to be raised.

"Our hopes for the 2015-16 Budget centre around proposals that will help build a stronger economy and a fairer society. Importantly they are about providing opportunity for everyone to get on in life."

– Will Rennie, Leader of the Scottish Liberal Democrats

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Protestors expected outside Scottish Parliament

Campaigners will be protesting outside the Scottish Parliament calling for more to be done to help households that are being affected by the so-called Bedroom Tax.

"The Scottish Budget presents the first opportunity to offer much-needed hope to those affected by the bedroom tax in Scotland and we call on John Swinney to start the ball rolling by committing £20 million extra funding."

– Graeme Brown, Director, Shelter Scotland

Scotland's Finance Secretary to set out budget

John Swinney, Finance Secretary Credit: PA

Scotland's Finance Secretary will outline his spending plans for 2014-15 this afternoon.

The draft Budget will be announced by John Swinney and debated by MSPs at Holyrood.

He is under pressure from opponents to address issues ranging from the cost of living, to college funding and childcare.

Campaigners will be protesting outside the Scottish Parliament calling for more to be done to help households that are being affected by the so-called Bedroom Tax.

"Scotland is financially stronger than UK" says Swinney

The Cabinet Secretary for Finance, John Swinney, has been commenting on the latest report from Westminster on Scottish Independence:

"It will be no surprise to people across Scotland that out of touch unelected Lords think Scotland is too small and too poor.

“All the evidence, including in this report, shows Scotland is in a far stronger financial position than the UK as a whole.

"What the Lords fail to mention is that a No vote would see Scots, within the UK, responsible for over two trillion pounds of debt and liabilities worth 145% of GDP, significantly more than an independent Scotland would face under any calculation."

– John Swinney, Cabinet Secretary for Finance

'Decisive action is needed now' says Scotland's Finance Secretary

The Finance Secretary for Scotland, John Swinney, has given his post-budget reaction:

“The Chancellor has downgraded every economic growth forecast he has made and as a consequence of his policies public sector debt is rising. Today the Chancellor should have offered a decisive injection of new capital to fuel economic recovery.

"He has however cut the hard cash the Scottish Government has available to spend and applied a “straight-jacket” of loan and equity facilities over which the Scottish Government will have no discretion and which will have to be repaid at a later date.

"Decisive action to stimulate economic growth is needed now."

– Scotland's Finance Secretary John Swinney
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