Homeowners moving house in Scotland are set to be given longer to sell their existing home before becoming ineligible to reclaim any Additional Dwelling Supplement they have paid as part of Land and Buildings Transaction Tax.

The change is among possible revisions to current rules published for consultation by the Scottish Government.

ADS is payable on purchase of second homes, including buy to let properties. Where buy and selling does not coincide, the buyer of a new home can end up paying ADS. Currently the amount paid can be reclaimed so long as the buyers original home is sold within 18 months the purchase of the second home. It is proposed that the 18 month time limit be doubled to 36 months.

It is proposed that the time available to dispose of a previous main residence after purchasing a new main residence is also doubled to 36 months, as is the time period for considering whether a property was a buyer’s only or main residence in the period prior to the purchase of a new main residence.

Other proposed changes affect inherited property, small shares in properties, divorce and separation, joint buyers, and local authority purchases of houses for social let.

‘The Additional Dwelling Supplement is an important part of the Scottish Government’s fair and progressive approach to tax’, said Public Finance Minister Tom Arthur. ‘It supports our ambition to protect housing opportunities for first-time buyers by making it more expensive for those people who wish to buy additional dwellings like second homes or buy-to-let properties.

‘While the ADS operates well in the majority of cases, there are some circumstances where it could work better. These proposed amendments are intended to address a number of concerns which have been expressed and improve fairness’.

The consultation is open for eight weeks.