The Land and Buildings Transaction Tax (LBTT) replaces UK stamp duty under new devolved powers contained in the Scotland Act 2012.

The Scottish Government has said nine out of 10 taxpayers will be better or no worse off under the system by Scotland’s new tax authority Revenue Scotland.

Alongside a new Scottish Landfill Tax (SLfT), which will replace UK landfill tax, the LBBT is the first tax to be introduced by the Scottish Parliament in 300 years.

The new system uses a graduated tax rate, working in a similar way to income tax.

Under LBTT, properties worth up to £145,000 will not attract any tax.

For sales between £145,000 and £250,000, a tax rate of 2 per cent will be applied, with the introduction of a new rate of 5 per cent between £250,000 and £325,000.

Between £325,000 and £750,000, the marginal rate will be 10 per cent, with a top rate of 12 per cent applying to all transactions above £750,000.

The new rates will only be payable on the portion of the total value which falls within each band.

This contrasts with the former “slab” structure of stamp duty, under which the higher tax rate was payable on the whole purchase price when a threshold was crossed.

Finance secretary John Swinney has said the new tax rates will see 50 per cent of all household transactions paying no tax and more than 40,000 buyers paying less on the purchase of a new home.

Mr Swinney said: “Our tax decisions have been driven by the principle that taxes should be proportionate to the ability to pay.

“The legal, financial, leadership and operational tax experts at Revenue Scotland have worked incredibly hard to ensure a smooth transition today for tax payers and I’m very grateful to them all.”

Murdoch Macleod, Revenue Scotland programme director, said: “It has been a genuine privilege to oversee the delivery of Revenue Scotland as the tax authority that will administer Scotland’s first tax collection system for 300 years.

The passion, commitment and dedication of every single member of my team has been inspirational and humbling. It has taken a huge amount of work, collaborating with solicitors and landfill operators, supporting organisations and HMRC to deliver this programme of work on time and to specification, and it is a testament to the professionalism of everyone involved that Revenue Scotland is now ready to collect and manage the taxes and deliver the highest level of service for Scotland.”

Dr Keith Nicholson, chair of Revenue Scotland, added: “Setting up a new tax authority from scratch, and developing the IT system, processes, technical training and all the other things involved in that is a huge task.

“The Revenue Scotland Board has been very impressed by the quality of the work done by all the team.

“This is a significant achievement of which everyone at Revenue Scotland should be rightly proud.”