13th May 2020

Property Law Update – Coronavirus (Scotland) (No2) Bill

The Coronavirus (Scotland) (No.2) Bill (the Bill”) was published by the Scottish Parliament on Monday 11 May 2020. The Bill will be subject to an expedited procedure and if approved by the Scottish Parliament is scheduled to come into force on the 20 May 2020.

The purpose of the Bill is a further response to the continued issues caused by the Coronavirus outbreak and to provide support (both financially and otherwise) to the public.

The Bill complements and supplements the Coronavirus (Scotland) Act 2020. Full details of the Coronavirus (Scotland) (No.2) Bill can be found at https://www.gov.scot/news/second-coronavirus-scotland-bill/

There are many provisions proposed by the Bill, however, the focus of this update is those provisions affecting the Property Sector and the main provisions are detailed below:

Changes to Student Tenancy Agreements (in purpose-built student accommodation)

The Bill includes provision to ensure that students who either (i) left their accommodation, or (ii) have been unable to return to it as a result of Coronavirus restrictions may end their contracts early if that is their wish. There will also be protection for students who are due to start further education during the next academic year that should the restrictions continue they will not be left in a position where they must pay for accommodation that they are not able to use for the full academic year. The Bill plans to temporarily introduce the following provisions;

  1. a 7-day notice to leave period for those currently tied into a student accommodation contract; and
  2. a 28-day notice to leave period for agreements entered while the Coronavirus (Scotland) Act 2020 is in force.

Land and Building Transaction Tax (“LBTT”) and the Additional Dwellinghouse Supplement.

At present (since 1 April 2016) an additional amount of LBTT, known as the Additional Dwelling Supplement (“the ADS”), is payable on the purchase of any additional dwellings in Scotland (such as buy-to-let properties and second homes) at a current rate of 4% on the whole purchase price (over and above the LBTT). If the previous main residence is sold within 18 months then the applicant can reclaim the ADS from Revenue Scotland. The Bill intends to extend this period to 27 months, the benefit of this is that individuals who intended to sell a previous main residence within their 18 month window and may not be able to do so as a result of the impact the coronavirus outbreak has had on the housing market will have more time to find a buyer and reclaim the ADS.

Jennifer Davidson
Associate Solicitor

Commercial Property
Blackadders LLP


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