ESPC has called on the Scottish government to review the Land and Buildings Transaction Tax (LBTT) threshold for first-time buyers, arguing that the current level no longer reflects market conditions and is restricting access to home ownership in higher-demand areas.
A survey of ESPC members found widespread concern that the £175,000 LBTT relief threshold is out of step with current property prices, particularly in Edinburgh, East Lothian and Midlothian. In Edinburgh, where the average first-time buyer home now costs £253,424, buyers face an LBTT bill of £1,671 — only around £600 less than that paid by non-first-time buyers.
According to Registers of Scotland data, there has been a 262% decrease in properties sold within the tax-free Band 0 bracket across Edinburgh, the Lothians, Fife and the Scottish Borders since LBTT was introduced in 2015. In Edinburgh alone, just 5% of properties sold in 2024 qualified for Band 0, down from 32% in 2015.
ESPC is calling for a zonal pricing model for first-time buyer relief—one that accounts for regional disparities in average property values. It is calling for Edinburgh’s threshold to increase to £250,000, with tailored increases in other high-cost areas like East Lothian, and Midlothian. Other areas could withstand the threshold remaining at £175,000.
Paul Hilton, chief executive of ESPC said: “The current LBTT threshold is simply not aligned with the market. First-time buyers are already stretched to cover deposits and legal costs. This additional tax burden is now making home ownership even more inaccessible.
“Introducing a zonal pricing model based on regional disparities of property prices is a practical, evidence-based proposal that reflects the diversity of Scotland’s housing market. A one-size-fits-all approach is no longer fit for purpose.”
Hilton continued: “With Scotland in the midst of a national housing emergency, the need for targeted policy intervention has never been more urgent. We speak on behalf of all our members in urging policymakers to modernise the LBTT system as a matter of priority, starting with immediate revisions to the first-time buyer threshold.”