Tax Explained
LBTT Explained
Land and Buildings Transaction Tax (LBTT) replaced Stamp Duty Land Tax in Scotland in April 2015. It applies to residential and commercial property purchases and leases, with different rates and thresholds to SDLT in England.
Quick answer
What are the key takeaways?
LBTT on residential property is 0% up to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above that.
Key takeaways
LBTT on residential property is 0% up to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above that.
First-time buyers can claim relief that raises the nil-rate band to £175,000.
The Additional Dwelling Supplement (ADS) adds 8% on top of standard LBTT rates for second homes and buy-to-let purchases.
LBTT returns must be filed and tax paid within 30 days of the effective date of the transaction.
What are the LBTT residential rates for 2026/27?
LBTT on residential property is charged at 0% on the portion of the purchase price up to £145,000, 2% from £145,001 to £250,000, 5% from £250,001 to £325,000, 10% from £325,001 to £750,000 and 12% on any amount above £750,000.
The tax is calculated on a slice basis, so only the portion of the price falling within each band is taxed at that band's rate — the same approach used by SDLT and LTT in other parts of the UK.
What is first-time buyer relief?
First-time buyers purchasing a property in Scotland for £175,000 or less pay no LBTT. Where the purchase price is above £175,000, first-time buyer relief raises the nil-rate threshold from £145,000 to £175,000, reducing the tax due.
To qualify, neither the buyer nor their spouse or civil partner must have previously owned a dwelling anywhere in the world. The relief is claimed on the LBTT return submitted to Revenue Scotland.
What is the Additional Dwelling Supplement?
The Additional Dwelling Supplement (ADS) is an 8% surcharge applied to the entire purchase price when buying an additional residential property in Scotland — including buy-to-let purchases, second homes and holiday homes — where the buyer already owns one or more dwellings.
The ADS is in addition to the standard LBTT rates, so the combined effective rate on a buy-to-let purchase above £145,000 starts at 10%. There is a limited reclaim window if a main residence is sold within 36 months of the new purchase.
How does LBTT compare to SDLT?
LBTT and SDLT share the same slice-based approach, but their thresholds and rates differ. The LBTT nil-rate band (£145,000) is higher than SDLT's standard nil-rate band (£125,000), which benefits buyers of lower-value Scottish properties.
However, for properties above £325,000, LBTT can exceed SDLT, particularly when the ADS is added for additional dwellings. The Scotland-specific rates and the ADS make it important to use a tool or accountant familiar with Scottish property tax when comparing costs across the UK.
Questions
What do people ask about lbtt?
These answers cover the practical points clients commonly raise before asking Countify to review their own position.
Ask a different questionLBTT must be paid and the return filed with Revenue Scotland within 30 days of the effective date of the transaction, usually the date of completion.
The ADS can be reclaimed if you sell your previous main residence within 36 months of the new purchase. Revenue Scotland administers the reclaim process.
Yes. LBTT applies to commercial property and leases in Scotland, with separate non-residential rates. The nil-rate band for non-residential purchases is £150,000.
Yes. Countify can calculate the LBTT and ADS due, explain first-time buyer relief and advise on the overall tax cost of a Scottish property transaction.
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