From 58788df5c2048890c0c3e958816309c38de5a6df Mon Sep 17 00:00:00 2001 From: Weishan-Lu <81481172+Weishan-Lu@users.noreply.github.com> Date: Thu, 16 Nov 2023 11:32:07 -0500 Subject: [PATCH] Added documentation for LTT and LBTT and fixed some errors (#777) * Update LBTT rate increase for non-primary residences * Fix SDLT description * Add documention for LTT and LBTT * Change the legend in graphs --- changelog_entry.yaml | 8 + docs/book/_toc.yml | 2 + docs/book/programs/gov/hmrc/stamp-duty.ipynb | 4 +- .../land-and-buildings-transaction-tax.ipynb | 6334 +++++++++++++++++ .../gov/wra/land-transaction-tax.ipynb | 1199 ++++ .../additional_residence_surcharge.yaml | 3 +- 6 files changed, 7547 insertions(+), 3 deletions(-) create mode 100644 docs/book/programs/gov/revenue_scotland/land-and-buildings-transaction-tax.ipynb create mode 100644 docs/book/programs/gov/wra/land-transaction-tax.ipynb diff --git a/changelog_entry.yaml b/changelog_entry.yaml index e69de29bb..f5dbe2307 100644 --- a/changelog_entry.yaml +++ b/changelog_entry.yaml @@ -0,0 +1,8 @@ +- bump: patch + changes: + added: + - Documentation for Land and Buildings Transaction Tax. + - Documentation for Land Transaction Tax. + fixed: + - Updated LBTT rate increase for non-primary residences. + - Fixed SDLT description. \ No newline at end of file diff --git a/docs/book/_toc.yml b/docs/book/_toc.yml index 5ae58a4c7..08984365b 100644 --- a/docs/book/_toc.yml +++ b/docs/book/_toc.yml @@ -17,6 +17,8 @@ parts: - file: programs/contrib/ubi-center/carbon-tax - file: programs/gov/ofgem/energy-price-guarantee - file: programs/gov/dcms/bbc/tv-licence + - file: programs/gov/revenue_scotland/land-and-buildings-transaction-tax + - file: programs/gov/wra/land-transaction-tax - caption: Using the model chapters: - file: usage/getting-started diff --git a/docs/book/programs/gov/hmrc/stamp-duty.ipynb b/docs/book/programs/gov/hmrc/stamp-duty.ipynb index 8423418c5..3c7a1f610 100644 --- a/docs/book/programs/gov/hmrc/stamp-duty.ipynb +++ b/docs/book/programs/gov/hmrc/stamp-duty.ipynb @@ -7,7 +7,7 @@ "source": [ "# Stamp Duty Land Tax\n", "\n", - "Stamp Duty Land Tax (SDLT) is a tax imposed on the purchase and rental of properties or land with values over a certain threshold in the UK. It applies to both residential and non-residential (commercial) properties. \n", + "Stamp Duty Land Tax (SDLT) is a tax imposed on the purchase and rental of properties or land with values over a certain threshold in England and Northern Ireland. It applies to both residential and non-residential (commercial) properties. \n", "\n", "Stamp Duty Land Tax parameters can be found in `policyengine_uk/parameters/gov/hmrc/stamp_duty` and logic in `policyengine_uk/variables/gov/hmrc/stamp_duty_land_tax.py`.\n", "\n", @@ -7367,7 +7367,7 @@ "name": "python", "nbconvert_exporter": "python", "pygments_lexer": "ipython3", - "version": "3.9.12" + "version": "3.9.7" }, "orig_nbformat": 4 }, diff --git a/docs/book/programs/gov/revenue_scotland/land-and-buildings-transaction-tax.ipynb b/docs/book/programs/gov/revenue_scotland/land-and-buildings-transaction-tax.ipynb new file mode 100644 index 000000000..7000ac320 --- /dev/null +++ b/docs/book/programs/gov/revenue_scotland/land-and-buildings-transaction-tax.ipynb @@ -0,0 +1,6334 @@ +{ + "cells": [ + { + "attachments": {}, + "cell_type": "markdown", + "metadata": {}, + "source": [ + "# Land and Buildings Transaction Tax\n", + "\n", + "Land and Buildings Transaction Tax (LBTT) is a property transaction tax administrated by Revenue Scotland in Scotland. It replaced the UK's Stamp Duty Land Tax (SDLT) for property transactions in Scotland starting from April 1, 2015. Similar to SDLT, LTT is imposed on property or land transactions, including purchases, transfers, and leases, with values over a certain threshold. It applies to both residential and non-residential (commercial) properties. \n", + "\n", + "Land and Buildings Transaction Tax parameters can be found in `policyengine_uk/parameters/gov/revenue_scotland/lbtt` and logic in `policyengine_uk/variables/gov/revenue_scotland/lbtt.py`.\n", + "\n", + "## Legislation\n", + "\n", + "The regulation of LBTT is defined in 2013 by [Land and Buildings Transaction Tax (Scotland) Act 2013](https://www.legislation.gov.uk/asp/2013/11/contents). In 2015, the Scottish Government issued [The Land and Buildings Transaction Tax (Tax Rates and Tax Bands) (Scotland) Order 2015](https://www.legislation.gov.uk/ssi/2015/126/schedule), which specifies additional regulations, such as tax bands, rates, and reliefs, and also defines the effective date of the LBTT. " + ] + }, + { + "attachments": {}, + "cell_type": "markdown", + "metadata": {}, + "source": [ + "## Rates\n", + "\n", + "Similar to SDLT, the rates of LBTT are structured with different threshold and tax bands based on the price of the property. The LBTT rates vary for each band, with higher rates applied to properties with prices that exceed a particular threshold. The rates and thresholds differ for purchase of residential and non-residential properties and rent. There is an additiional charge called Additional Dwelling Supplement (ADS) imposed on the purchase of additional residential properties, resulting in a higher rate of tax. First-time residential property buyers are eligible to waive LBTT if the property price no more than £175,000 (a relief up to £600).\n", + "\n", + "The rules and thresholds for LBTT may change over time due to government policy adjustments. Here we show current rates and thresholds for LBTT in 2023 below:\n", + "\n", + "- Residential\n", + "\n", + " - First-time\n", + "\n", + " Up to £175,000: 0%\n", + "\n", + " £175,000 to £250,000: 2%\n", + "\n", + " £250,000 to £325,000: 5%\n", + " \n", + " £325,000 to £750,000: 10%\n", + " \n", + " Over £750,000: 12%\n", + "\n", + " - Primary (non first-time)\n", + "\n", + " Up to £145,000: 0%\n", + "\n", + " £145,000 to £250,000: 2%\n", + "\n", + " £250,000 to £325,000: 5%\n", + " \n", + " £325,000 to £750,000: 10%\n", + " \n", + " Over £750,000: 12%\n", + "\n", + " - Non-primary (ADS): An additional 6% on top of the rates for primary properties\n", + "\n", + " Up to £145,000: 6%\n", + "\n", + " £145,000 to £250,000: 8%\n", + "\n", + " £250,000 to £325,000: 11%\n", + " \n", + " £325,000 to £750,000: 16%\n", + " \n", + " Over £750,000: 18%\n", + "\n", + "- Non-residential purchase\n", + "\n", + " Up to £150,000: 0%\n", + " \n", + " £150,000 to £250,000: 1%\n", + " \n", + " Over £250,000: 5%\n", + "\n", + "- Non-residential rent\n", + "\n", + " Up to £150,000: 0%\n", + " \n", + " £150,000 to £2,000,000: 1%\n", + " \n", + " Over £2,000,000: 5%\n", + "\n" + ] + }, + { + "cell_type": "code", + "execution_count": 39, + "metadata": { + "tags": [ + "hide-input" + ] + }, + "outputs": [ + { + "name": "stderr", + "output_type": "stream", + "text": [ + "/Users/weishan/opt/anaconda3/lib/python3.9/site-packages/pandas/core/indexing.py:1817: SettingWithCopyWarning:\n", + "\n", + "\n", + "A value is trying to be set on a copy of a slice from a DataFrame.\n", + "Try using .loc[row_indexer,col_indexer] = value instead\n", + "\n", + "See the caveats in the documentation: https://pandas.pydata.org/pandas-docs/stable/user_guide/indexing.html#returning-a-view-versus-a-copy\n", + "\n", + "/var/folders/t3/s6r8tt1s4dx9785_lmk6n_nh0000gn/T/ipykernel_66836/2031362955.py:42: SettingWithCopyWarning:\n", + "\n", + "\n", + "A value is trying to be set on a copy of a slice from a DataFrame.\n", + "Try using .loc[row_indexer,col_indexer] = value instead\n", + "\n", + "See the caveats in the documentation: https://pandas.pydata.org/pandas-docs/stable/user_guide/indexing.html#returning-a-view-versus-a-copy\n", + "\n" + ] + }, + { + "data": { + "application/vnd.plotly.v1+json": { + "config": { + "plotlyServerURL": "https://plot.ly" + }, + "data": [ + { + "hovertemplate": "Label=LBTT on residential property
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+ ], + "tickformat": ",.0%", + "title": { + "text": "Rate" + } + } + } + } + }, + "metadata": {}, + "output_type": "display_data" + } + ], + "source": [ + "import pandas as pd\n", + "import plotly.express as px\n", + "from policyengine_core.charts import format_fig\n", + "from policyengine_uk import CountryTaxBenefitSystem\n", + "\n", + "system = CountryTaxBenefitSystem()\n", + "lbtt = system.parameters.gov.revenue_scotland.lbtt\n", + "\n", + "parameters = [\n", + " lbtt.residential.rate,\n", + " lbtt.residential.first_time_buyer_rate,\n", + " lbtt.non_residential,\n", + " lbtt.rent\n", + "]\n", + "thresholds = []\n", + "rates = []\n", + "labels = []\n", + "\n", + "for parameter in parameters:\n", + " for param in parameter.brackets:\n", + " thresholds.append(param.threshold.values_list[0].value)\n", + " rates.append(param.rate.values_list[0].value)\n", + " labels.append(parameter.metadata.get(\"label\"))\n", + "\n", + "# add a row showing tax rate when property price is higher than the largest threshold for each property type\n", + "price = max(thresholds)+200000\n", + "for parameter in parameters:\n", + " thresholds.append(price)\n", + " rates.append(parameter.brackets[-1].rate.values_list[0].value)\n", + " labels.append(parameter.metadata.get(\"label\"))\n", + "\n", + "df = pd.DataFrame({\n", + " \"Threshold\": thresholds,\n", + " \"Rate\": rates,\n", + " \"Label\": labels\n", + "})\n", + "\n", + "# add rates for secondary residences\n", + "ars = lbtt.residential.additional_residence_surcharge.values_list[0].value\n", + "df_secondary = df[df.Label==\"LBTT on residential property\"]\n", + "df_secondary.loc[:,\"Label\"]=\"LBTT on secondary residences\"\n", + "df_secondary[\"Rate\"] = df_secondary[\"Rate\"].apply(lambda x: x+ars)\n", + "df = pd.concat([df, df_secondary])\n", + "\n", + "# plot\n", + "fig = px.line(\n", + " df,\n", + " x=\"Threshold\",\n", + " y=\"Rate\",\n", + " color=\"Label\",\n", + " title=\"Land and Buildings Transaction Tax (LBTT) rates over property price thresholds\"\n", + ").update_layout(\n", + " yaxis_tickformat=\",.0%\",\n", + " xaxis_tickprefix=\"£\",\n", + " legend_title=\"\"\n", + ").update_traces(\n", + " line_shape=\"hv\"\n", + ")\n", + "fig = format_fig(fig)\n", + "fig\n" + ] + }, + { + "attachments": {}, + "cell_type": "markdown", + "metadata": {}, + "source": [ + "The first-time buyer relief only applies for homes priced under £175,000. Here we simulate the marginal effect of LBTT." + ] + }, + { + "cell_type": "code", + "execution_count": 38, + "metadata": { + "tags": [ + "hide-input" + ] + }, + "outputs": [ + { + "data": { + "application/vnd.plotly.v1+json": { + "config": { + "plotlyServerURL": "https://plot.ly" + }, + "data": [ + { + "hovertemplate": "Home price=%{x}
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"tickprefix": "£", + "title": { + "text": "Price" + } + }, + "yaxis": { + "anchor": "x", + "domain": [ + 0, + 1 + ], + "tickformat": ",.0%" + }, + "yaxis2": { + "anchor": "x2", + "domain": [ + 0, + 1 + ], + "tickprefix": "£" + } + } + } + }, + "metadata": {}, + "output_type": "display_data" + } + ], + "source": [ + "from policyengine_uk import Simulation\n", + "\n", + "sim = Simulation(\n", + " situation=dict(\n", + " households=dict(\n", + " household=dict(\n", + " main_residential_property_purchased_is_first_home=True,\n", + " region=\"SCOTLAND\",\n", + " members=[\"person\"]\n", + " )\n", + " ),\n", + " people=dict(\n", + " person=dict(\n", + " age=30,\n", + " )\n", + " ),\n", + " axes=[[\n", + " dict(\n", + " name=\"main_residential_property_purchased\",\n", + " min=0,\n", + " max=5_000_000,\n", + " count=1_000,\n", + " )\n", + " ]]\n", + " )\n", + ")\n", + "\n", + "import pandas as pd\n", + "\n", + "lbtt_sim = sim.calculate(\"land_and_buildings_transaction_tax\")\n", + "home_price = sim.calculate(\"main_residential_property_purchased\")\n", + "\n", + "marginal_rate = (lbtt_sim[1:] - lbtt_sim[:-1]) / (home_price[1:] - home_price[:-1])\n", + "home_price = home_price[:-1]\n", + "\n", + "df = pd.DataFrame({\n", + " \"Home price\": home_price,\n", + " \"Marginal LBTT rate\": marginal_rate,\n", + " \"LBTT\": lbtt_sim[:-1]\n", + "})\n", + "\n", + "import plotly.express as px\n", + "from plotly.subplots import make_subplots\n", + "\n", + "# left shows marginal rate, right shows total LBTT\n", + "\n", + "fig = make_subplots(rows=1, cols=2, subplot_titles=(\"Marginal LBTT rate\", \"Total LBTT\"))\n", + "\n", + "fig.add_trace(\n", + " px.line(\n", + " df,\n", + " x=\"Home price\",\n", + " y=\"Marginal LBTT rate\",\n", + " title = \"Marginal LBTT rate\"\n", + " ).update_traces(\n", + " line_shape=\"hv\"\n", + " ).data[0],\n", + " row=1, col=1\n", + ").update_xaxes(\n", + " row=1, col=1,\n", + " title_text=\"Price\",\n", + " tickprefix=\"£\"\n", + ").update_yaxes(\n", + " row=1, col=1,\n", + " tickformat=\",.0%\"\n", + ")\n", + "\n", + "fig.add_trace(\n", + " px.line(\n", + " df,\n", + " x=\"Home price\",\n", + " y=\"LBTT\",\n", + " title = \"Total LBTT\"\n", + " ).update_traces(\n", + " line_shape=\"hv\"\n", + " ).data[0],\n", + " row=1, col=2\n", + ").update_xaxes(\n", + " row=1, col=2,\n", + " title_text=\"Price\",\n", + " tickprefix=\"£\"\n", + ").update_yaxes(\n", + " row=1, col=2,\n", + " tickprefix=\"£\"\n", + ")\n", + "\n", + "fig = format_fig(fig)\n", + "fig" + ] + }, + { + "cell_type": "code", + "execution_count": null, + "metadata": {}, + "outputs": [], + "source": [] + } + ], + "metadata": { + "kernelspec": { + "display_name": "base", + "language": "python", + "name": "python3" + }, + "language_info": { + "codemirror_mode": { + "name": "ipython", + "version": 3 + }, + "file_extension": ".py", + "mimetype": "text/x-python", + "name": "python", + "nbconvert_exporter": "python", + "pygments_lexer": "ipython3", + "version": "3.9.7" + }, + "orig_nbformat": 4 + }, + "nbformat": 4, + "nbformat_minor": 2 +} diff --git a/docs/book/programs/gov/wra/land-transaction-tax.ipynb b/docs/book/programs/gov/wra/land-transaction-tax.ipynb new file mode 100644 index 000000000..b7dfc3d10 --- /dev/null +++ b/docs/book/programs/gov/wra/land-transaction-tax.ipynb @@ -0,0 +1,1199 @@ +{ + "cells": [ + { + "attachments": {}, + "cell_type": "markdown", + "metadata": {}, + "source": [ + "# Land Transaction Tax\n", + "\n", + "Land Transaction Tax (LTT) is a property transaction tax administrated by the Welsh Revenue Authority (WRA) in Wales. It replaced the UK's Stamp Duty Land Tax (SDLT) for property transactions in Wales starting from April 1, 2018. Similar to SDLT, LTT is imposed on property or land transactions, including purchases, transfers, and leases, with values over a certain threshold. It applies to both residential and non-residential (commercial) properties. \n", + "\n", + "Land Transaction Tax parameters can be found in `policyengine_uk/parameters/gov/wra/land_transaction_tax` and logic in `policyengine_uk/variables/gov/wra/land_transaction_tax.py`.\n", + "\n", + "## Legislation\n", + "\n", + "The original regulation of LTT is defined in [The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018](https://www.legislation.gov.uk/wsi/2018/128/schedule). It was amended in 2020 by [The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) (Amendment) Regulations 2020](https://www.legislation.gov.uk/wsi/2020/1618/regulation/6/made). The Amendment revised the tax bands and tax rates defined in the 2018 Regulations." + ] + }, + { + "attachments": {}, + "cell_type": "markdown", + "metadata": {}, + "source": [ + "## Rates\n", + "\n", + "Similar to SDLT, the rates of LTT are structured with different threshold and tax bands based on the price of the property. The LTT rates vary for each band, with higher rates applied to properties with prices that exceed a particular threshold. The rates and thresholds also differ for purchase of residential and non-residential properties and rent. Buyers will pay at a higher LTT rate for non-primary residential properties. \n", + "\n", + "But differing from SDLT. there is no first-time buyers' relief in LTT. Therefore, we're not plotting marginal LTT rate here.\n", + "\n", + "The rules and thresholds for LTT may change over time due to government policy adjustments. Here we show current rates and thresholds for LTT in 2023 below:\n", + "\n", + "- Residential\n", + "\n", + " - Primary\n", + "\n", + " Up to £180,000: 0%\n", + "\n", + " £180,000 to £250,000: 3.5%\n", + "\n", + " £250,000 to £400,000: 5%\n", + " \n", + " £400,000 to £750,000: 7.5%\n", + " \n", + " £750,000 to £1,500,000: 10%\n", + " \n", + " Over £1,500,000: 12%\n", + " - Non-primary: An additional 4% on top of the rates for primary properties\n", + "\n", + " Up to £180,000: 4%\n", + " \n", + " £180,000 to £250,000: 7.5%\n", + " \n", + " £250,000 to £400,000: 9%\n", + " \n", + " £400,000 to £750,000: 11.5%\n", + " \n", + " £750,000 to £1,500,000: 14%\n", + " \n", + " Over £1,500,000: 16%\n", + "\n", + "- Non-residential\n", + "\n", + " Up to £225,000: 0%\n", + " \n", + " £225,000 to £250,000: 1%\n", + " \n", + " £250,000 to £1,000,000: 5%\n", + " \n", + " Over £1,000,000: 6%\n", + "\n", + "- Rent\n", + "\n", + " Up to £225,000: 0%\n", + " \n", + " £225,000 to £2,000,000: 1%\n", + " \n", + " Over £2,000,000: 2%\n" + ] + }, + { + "cell_type": "code", + "execution_count": 49, + "metadata": { + "tags": [ + "hide-input" + ] + }, + "outputs": [ + { + "data": { + "application/vnd.plotly.v1+json": { + "config": { + "plotlyServerURL": "https://plot.ly" + }, + "data": [ + { + "hovertemplate": "Label=LTT on primary residences
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{ + "text": "Rate" + } + } + } + } + }, + "metadata": {}, + "output_type": "display_data" + } + ], + "source": [ + "import pandas as pd\n", + "import plotly.express as px\n", + "from policyengine_core.charts import format_fig\n", + "from policyengine_uk import CountryTaxBenefitSystem\n", + "\n", + "system = CountryTaxBenefitSystem()\n", + "wra = system.parameters.gov.wra.land_transaction_tax\n", + "\n", + "parameters = [\n", + " wra.residential.primary,\n", + " wra.residential.higher_rate,\n", + " wra.non_residential,\n", + " wra.rent\n", + "]\n", + "thresholds = []\n", + "rates = []\n", + "labels = []\n", + "\n", + "for parameter in parameters:\n", + " for param in parameter.brackets:\n", + " thresholds.append(param.threshold.values_list[0].value)\n", + " rates.append(param.rate.values_list[0].value)\n", + " labels.append(parameter.metadata.get(\"label\"))\n", + "\n", + "# add a row showing tax rate when property price is higher than the largest threshold for each property type\n", + "price = max(thresholds)+200000\n", + "for parameter in parameters:\n", + " thresholds.append(price)\n", + " rates.append(parameter.brackets[-1].rate.values_list[0].value)\n", + " labels.append(parameter.metadata.get(\"label\"))\n", + "# \n", + "df = pd.DataFrame({\n", + " \"Threshold\": thresholds,\n", + " \"Rate\": rates,\n", + " \"Label\": labels\n", + "})\n", + "\n", + "# plot\n", + "fig = px.line(\n", + " df,\n", + " x=\"Threshold\",\n", + " y=\"Rate\",\n", + " color=\"Label\",\n", + " title=\"Land Transaction Tax (LTT) rates over property price thresholds\"\n", + ").update_layout(\n", + " yaxis_tickformat=\",.0%\",\n", + " xaxis_tickprefix=\"£\",\n", + " legend_title=\"\"\n", + ").update_traces(\n", + " line_shape=\"hv\"\n", + ")\n", + "fig = format_fig(fig)\n", + "fig\n" + ] + }, + { + "cell_type": "code", + "execution_count": null, + "metadata": {}, + "outputs": [], + "source": [] + } + ], + "metadata": { + "kernelspec": { + "display_name": "base", + "language": "python", + "name": "python3" + }, + "language_info": { + "codemirror_mode": { + "name": "ipython", + "version": 3 + }, + "file_extension": ".py", + "mimetype": "text/x-python", + "name": "python", + "nbconvert_exporter": "python", + "pygments_lexer": "ipython3", + "version": "3.9.7" + }, + "orig_nbformat": 4 + }, + "nbformat": 4, + "nbformat_minor": 2 +} diff --git a/policyengine_uk/parameters/gov/revenue_scotland/lbtt/residential/additional_residence_surcharge.yaml b/policyengine_uk/parameters/gov/revenue_scotland/lbtt/residential/additional_residence_surcharge.yaml index 666355400..0f3d37776 100644 --- a/policyengine_uk/parameters/gov/revenue_scotland/lbtt/residential/additional_residence_surcharge.yaml +++ b/policyengine_uk/parameters/gov/revenue_scotland/lbtt/residential/additional_residence_surcharge.yaml @@ -2,10 +2,11 @@ description: Increase in percentage rates for non-primary residence purchases. values: 2016-04-01: 0.03 2019-01-25: 0.04 + 2022-12-16: 0.06 metadata: unit: /1 name: lbtt_rate_increase_for_secondary_residences label: LBTT fixed rate increase for secondary residences reference: - title: Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 2A(4)(2) - href: https://www.legislation.gov.uk/asp/2013/11/schedule/2A/part/3/crossheading/additional-amount/2016-04-01 + href: https://www.legislation.gov.uk/asp/2013/11/schedule/2A/part/3/crossheading/additional-amount/2022-12-16