Land & Building Transaction Tax (LBTT)

From 1st April 2015 all properties sold in Scotland need to pay Land & Buildings Transaction Tax (LBTT), which replaced Stamp Duty Land Tax. LBTT is paid based on the following bands, however only the portion of the selling price above each threshold commands that tax rate.

The LBTT bands:

  • £0 to £145,000 - No tax
  • £145,001 to £250,000 - 2%
  • £250,001 to £325,000 - 5%
  • £325,001 to £750,000 - 10%
  • Over £750,000 - 12%

The Scottish Government followed this in its Draft Budget for 2016/2017, which was published on 16th December 2015 and proposed the introduction of a supplementary LBTT charge on the purchase of additional residential properties in Scotland, also with effect from 1st April 2016. Put simply, homeowners wishing to buy a second home or buy-to-let property will face an additional tax charge of 3% payable on top of the current LBTT rate. The supplement will also affect residential property purchases by companies and individuals acting as sole traders.

Arran Estate Agents

The 3% supplement will be levied on all relevant transactions above £40,000, which is below the current threshold for LBTT. It will be applied to the whole purchase, not just the proportion exceeding £40,000.

The proposed rates are outlined below (source:

Purchase Price Additional Homes Supplement
Up to £145,000 3%
£145,000.01 - £250,000 3%
£250,000.01 - £325,000 3%
£325,000.01 - £750,000 3%
£750,000.01 3%

Non-Residential Property Transactions - LBTT rates & bands

For non-residential property transactions, the rate of tax is determined in the same manner as for residential property transactions but by reference to different rates and bands:

Purchase Price LBTT rate
Up to £150,000 0%
Above £150,000 to £350,000 3%
Above £350,000 4.5%

The Land and Buildings Transaction (LBTT) Calculator tool for properties bought in Scotland can be found here: