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:

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.

Additional Dwelling Supplement – LBTT Rates and Bands

The ADS rate was changed to 4% with effect from 25 January 2019. The contract date and the effective date of your transaction will determine whether the changes affect you.

ADS rates for transactions on or after 25 January 2019

ADS is 4% of the ‘relevant consideration’ (usually the purchase price).

Transitional Provision

Where the effective date of a land transaction is on or after 25 January 2019 and the contract for the land transaction was entered into prior to 12 December 2018, the tax rate of 3% for ADS that was in force prior to 25 January 2019 will apply.

Further information can be found at LBTT10080. The Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016 provides for an Additional Dwelling Supplement (ADS) of LBTT to be applied on purchases of additional residential properties in Scotland of £40,000 or more. Paragraph 4 of schedule 2A sets out how the Additional Dwelling Supplement is calculated and the parameters for defining the relevant consideration. The supplement may apply to parts of some non-residential transactions, which the taxpayer (or in most cases their agent) will determine by the concept of "just and reasonable apportionment".