In April 2015, Stamp Duty Land Tax (SDLT) was replaced in Scotland by a devolved property tax called Land and Buildings Transaction Tax (LBTT), collected by Revenue Scotland (Mòr-chòisrean na h-Alba).
For home buyers purchasing a primary main residence in Scotland, LBTT provides a 0% tax threshold on property values up to £145,000 (or £175,000 for qualifying First-Time Buyers). However, buyers purchasing an additional residential property (such as a second holiday home or buy-to-let investment) must pay a mandatory 6.0% Additional Dwelling Supplement (ADS) applied across the total purchase price.
⚙️ Rules & Thresholds
- Standard Main Residence LBTT Tax Bands (2026/27):
- £0 – £145,000: 0% (Standard Tax-Free Threshold).
- First-Time Buyer Relief: Extends the 0% threshold up to £175,000 (saving up to £600).
- £145,001 (or £175,000) – £250,000: 2.0%.
- £250,001 – £325,000: 5.0%.
- £325,001 – £750,000: 10.0%.
- Over £750,000: 12.0%.
- Additional Dwelling Supplement (ADS 6.0%): Applied to buy-to-let purchases and second homes valued at £40,000 or more. ADS is calculated as a flat 6.0% of the entire purchase price, added on top of standard LBTT rates.
- 18-Month Main Residence Refund Window: If you pay ADS when buying a new main home before selling your old one, you can claim a 100% refund of the 6% ADS from Revenue Scotland if you sell your previous main residence within 18 months.
📊 Practical Examples
- Purchase Price: £210,000.00
- Buyer Status: First-Time Buyer (0% threshold raised to £175,000)
- First £175,000 Band (0%): £0.00
- £175,001 – £210,000 Band (2.0%): £35,000 × 2.0% = **£700.00**
Total Base LBTT Payable: **£700.00**.
First-Time Buyer Savings: Saved £600 compared to standard £145k threshold (£1,300 base LBTT).
Effective Tax Rate: **0.33%** of purchase price.
📑 Common Pitfalls
- Confusing Scottish 18-Month ADS Refund Window with UK 36-Month Rule: Scotland enforces a strict 18-month deadline for selling your previous main home to claim an ADS refund (unlike England’s 36-month window).
- Underestimating the 6.0% ADS Surcharge: Buying a £250,000 second home incurs £15,000 in ADS surcharge alone, plus £2,100 in base LBTT (£17,100 total tax).
- Failing to File Revenue Scotland LBTT Return: Even if zero tax is due (for purchases between £40,000 and £145,000), a formal LBTT tax return must still be submitted to Revenue Scotland within 30 days of completion.
❓ Frequently Asked Questions (FAQ)
For standard main residence buyers in Scotland, the zero-rate LBTT threshold is £145,000. For qualifying First-Time Buyers, the zero-rate threshold is increased to £175,000, saving up to £600 in tax.
The Additional Dwelling Supplement (ADS) is a 6.0% tax surcharge levied by Revenue Scotland on purchases of second homes and buy-to-let properties valued at £40,000 or more, charged on top of standard LBTT rates.
If you paid the 6% ADS surcharge because you bought a new main home before selling your old one, you can claim a full refund from Revenue Scotland if you complete the sale of your previous main residence within 18 months.
LBTT is collected by Revenue Scotland (Mòr-chòisrean na h-Alba), the non-ministerial department of the Scottish Administration responsible for collecting Scotland's devolved taxes.