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.

Residential Property Transactions – LBTT Rates and Bands

For residential property transactions, the rate of tax is determined by reference to the amount of the chargeable consideration for the transaction falling within the bands below:

Purchase Price LBTT rate
Up to £145,000 0%
Above £145,000 to £250,000 2%
Above £250,000 to £325,000 5%
Above £325,000 to £750,000 10%
Over £750,000 12%

LBTT(S)A 2013 section 24 provides for the calculation and section 59(1) sets out what counts as residential property. If the purchase price is above the nil rate tax band of £145,000, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within the relevant bands. For example, a house bought for £280,000 is charged at:

• 0% for the first £145,000, then
• 2% for the next £105,000
• 5% for the next £30,000 and
• so £3,600 must be paid in LBTT

Consideration genuinely attributable to moveable property is not included within chargeable consideration. Moveable property includes fixtures and fittings e.g. curtains and furniture.

Arran Estate Agents

Additional Dwelling Supplement – LBTT Rates and Bands

The LBTT Additional Dwelling Supplement (ADS) initially came into force on 1 April 2016. The ADS is charged at 6%, and is payable on the total purchase price of an additional dwelling if the relevant consideration (usually the purchase price) is £40,000 or more. The 6% rate will apply to transactions entered into on or after 16 December 2022. For transactions entered into on or before 15 December 2022, the previous 4% rate will apply.

For clarification, ADS is 6% of the ‘relevant consideration’ (usually the purchase price).

The ADS is an important element of the Scottish Government’s drive to protect opportunities for first-time buyers in Scotland, reinforcing the progressive approach in place for LBTT rates and bands.

Further information and guidance regarding the ADS is available on the Revenue Scotland website.