Tax Explained
Second Homes in Scotland: Council Tax and Tax
Owning a second home in Scotland now comes with four separate costs that are easy to underestimate: a council tax premium, the Additional Dwelling Supplement on purchase, licensing and tax rules if it is let, and Capital Gains Tax when it is sold.
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Quick answer
What are the key takeaways?
Since April 2024 Scottish councils can charge up to double council tax on second homes.
Key takeaways
Since April 2024 Scottish councils can charge up to double council tax on second homes.
Buying a second home attracts the 8% Additional Dwelling Supplement on top of LBTT.
Letting it short-term needs a licence, and the old furnished holiday let tax rules ended in April 2025.
A home that is not your main residence is liable to CGT at 18% or 24% on sale, reported within 60 days.
A property let enough to qualify for non-domestic rates leaves council tax — and may get Small Business Bonus Scheme relief.
The council tax premium
From 1 April 2024 Scottish councils have been able to charge a premium of up to 100% on second homes — up to double the normal bill. Most councils have applied it, so check your council's current policy and whether any exception applies, such as a job-related second home.
Buying: LBTT and the Additional Dwelling Supplement
A second residential property costing £40,000 or more attracts the Additional Dwelling Supplement at 8% of the whole price, on top of ordinary LBTT. If you are replacing your main home and sell the old one within 36 months, the supplement can be reclaimed.
Letting it out
Short-term letting in Scotland needs a licence from the council. Furnished holiday lettings lost their special tax treatment from April 2025, so profits are ordinary property income and Section 24 restricts mortgage interest relief. A property available for at least 140 days and actually let for at least 70 days in the year can be assessed for non-domestic rates instead of council tax.
Selling: Capital Gains Tax
Private residence relief covers only your main home. On a second home, gains above the £3,000 annual exempt amount are taxed at 18% or 24%, and a UK residential property gain must be reported and the tax paid within 60 days of completion.
Questions
What do people ask about second homes in scotland?
These answers cover the practical points clients commonly raise before asking Countify to review their own position.
Ask a different questionCan I choose which home is my main residence?
Where you have two homes you can nominate which is your main residence for CGT within two years of acquiring the second, which can change which gain is taxable.
Is a second home in Scotland subject to Inheritance Tax?
Yes, as part of your estate, but it does not qualify for the residence nil-rate band unless it was your residence and passes to direct descendants.
Does the council tax premium apply to empty homes?
Do I pay ADS if I buy with my spouse?
Couples are treated as one unit: if either already owns a home and you are not replacing your main residence, ADS usually applies.
Related advice
Which advice should you read next?
These related guides connect the next practical questions around this topic.
ADS
ADS is charged at 8% of the full purchase price for transactions on or after 5 December 2024 (previously 6%).
Short-term lets
You must hold a short-term let licence before taking bookings or receiving guests. A licence usually lasts three years.
LBTT
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.
Related tools
Which calculator can help you estimate the numbers?
Use these tools for quick estimates before asking Countify to review the facts.
LBTT Calculator Scotland
Scottish LBTT band by band, with first-time buyer relief, 8% ADS and commercial rates.
Capital Gains Tax Calculator
Residential vs other assets, £3,000 annual exempt amount, BADR included.
Small Business Bonus Scheme Checker
100% relief to £12,000 rateable value, tapers to £20,000.
Related reading
Where can you read more UK tax updates?
Countify's blog covers practical updates for individuals, landlords and business owners.
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