Land and Buildings Transaction Tax (LBTT) — Scotland
LBTT is the tax payable when buying property or land in Scotland. The amount due depends on the purchase price, your buyer status (first-time buyer, moving home, or buying an additional property), and whether the property is residential, mixed-use, or non-residential.
Current residential LBTT bands (home movers)
- Up to £145,000: 0%
- £145,001 – £250,000: 2%
- £250,001 – £325,000: 5%
- £325,001 – £750,000: 10%
- Over £750,000: 12%
LBTT is calculated on slices of the price that fall within each band (marginal rates).
First-time buyer relief
Eligible first-time buyers benefit from an increased nil-rate threshold of £175,000 (up from £145,000). If the price exceeds £175,000, you still pay no LBTT on the first £175,000 and standard bands apply to the portion above that.
Worked example (first-time buyer)
Price £200,000 → £0 on the first £175,000, then 2% on £25,000 = £500 LBTT.
Additional properties (second homes & buy-to-let) — ADS
If you buy an additional residential property while you already own one or more, the Additional Dwelling Supplement (ADS) applies at 8% of the full purchase price, in addition to any LBTT due.
- ADS applies to most second homes, holiday homes and buy-to-let purchases.
- No ADS is payable where the price is below £40,000.
- If you are directly replacing your only or main residence, ADS may not apply or can be reclaimed (see below).
Worked example (additional property)
Price £250,000 → LBTT (home-mover bands) = £2,100. ADS = 8% of £250,000 = £20,000. Total = £22,100.
ADS changes & reclaim rules
- ADS rate: increased from 6% to 8% for transactions with an effective date on or after 5 December 2024.
- Reclaim window: for transactions on or after 1 April 2024, you have up to 36 months to sell your previous main residence and reclaim ADS (18 months applies to earlier transactions).
- Small shares: where your share in another dwelling is worth under £40,000, it is generally disregarded for ADS.
Worked example (replacing your main residence)
You buy a new main home before selling your old one → ADS is due on completion. If you then sell your previous main residence within 36 months and meet the other conditions, you can reclaim the ADS from Revenue Scotland.
Mixed-use & non-residential
“Mixed-use” (e.g. a shop with a flat) and non-residential transactions use different LBTT bands and do not attract ADS. If part of the purchase is residential and part is commercial land or buildings, mixed-use rules will typically apply.
Quick guidance for Scottish estate agents & landlords
- First-time buyers: emphasise the £175k nil-rate relief and show clients how it reduces LBTT even above £175k.
- Home-movers: remind clients LBTT is marginal; small price changes may have limited tax impact but can affect competition.
- Investors/second homes: price in the full 8% ADS on the purchase price when modelling yields and ROI.
- Chains: where timing forces completion before sale of the current main residence, explain ADS may be due up-front but potentially reclaimable within 36 months if conditions are met.
- Documentation: keep clear evidence of occupation and sale dates for ADS reclaim (titles, completion statements, council tax/utility evidence).
FAQs
Do joint buyers both need to be first-time buyers?
Yes — to claim first-time buyer relief, all buyers must be first-time buyers and intend to occupy the property as their only or main residence.
We’re upsizing but haven’t sold yet — will ADS apply?
Usually yes at completion, but if you sell your previous main residence within the 36-month window (for purchases on/after 1 April 2024) and meet the other conditions, you can reclaim the ADS.
Does ADS apply to six or more dwellings bought together?
Where six or more dwellings are bought in a single transaction, the purchase is generally treated as non-residential for LBTT and ADS does not usually apply.
What if there’s a small inherited share in a family property?
Small interests under £40,000 are generally disregarded for ADS. Always confirm specifics before completing.
Last updated: 26 September 2025. This page is for general guidance only and doesn’t constitute legal or tax advice.
Accuracy notice
We endeavour to keep this guidance up to date (including first-time buyer relief and the 8% ADS rate). Calculations are illustrative only; please verify figures before concluding missives.
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