If you’re buying property or land in Scotland, you may be liable to pay Land and Buildings Transaction Tax (LBTT). LBTT replaced the UK-wide Stamp Duty Land Tax (SDLT) in Scotland in 2015 and applies to both residential and non-residential transactions. The amount you pay depends on the purchase price and the type of property involved.
At Gibson Kerr, our estate agent solicitors provide expert advice on all aspects of LBTT. We ensure that your property transaction complies with current tax regulations and that you understand any liabilities before proceeding.
Residential LBTT Rates (2025–2026)
As of 1 April 2021, the LBTT rates for residential property purchases in Scotland are:
- Up to £145,000: 0%
- £145,001 to £250,000: 2%
- £250,001 to £325,000: 5%
- £325,001 to £750,000: 10%
- Over £750,000: 12%
For first-time buyers, the nil rate band is extended to £175,000, providing additional relief. Different rates apply to commercial property purchases and certain lease transactions.
Additional Dwelling Supplement (ADS)
If you’re purchasing an additional residential property, such as a second home or buy-to-let investment, you may be subject to the Additional Dwelling Supplement (ADS). As of December 5, 2024, the ADS rate increased from 6% to 8% of the total purchase price.
This supplement applies to most second home purchases and is payable in addition to the standard LBTT rates. For example, if you’re buying a second property valued at £250,000, the ADS would amount to £20,000.
Calculating Your LBTT
LBTT is calculated using a progressive tax system, meaning different portions of the purchase price are taxed at different rates. For example, if you’re buying a residential property for £300,000:
The first £145,000 is taxed at 0%: £0
The next £105,000 (£145,001 to £250,000) at 2%: £2,100
The remaining £50,000 (£250,001 to £300,000) at 5%: £2,500
Total LBTT payable: £4,600
If this is an additional property, you’d also pay 8% ADS on the full £300,000, which amounts to £24,000, bringing the total tax liability to £28,600.
How Gibson Kerr Can Help
Our experienced estate agent solicitors at Gibson Kerr are well-versed in the intricacies of LBTT. We offer:
Personalised Advice: Tailored guidance based on your specific circumstances.
Accurate Calculations: Ensuring you understand your tax liabilities upfront.
Efficient Processing: Handling all necessary paperwork and submissions to Revenue Scotland.
Strategic Planning: Advising on potential reliefs and exemptions, such as first-time buyer relief.
Whether you’re a first-time buyer, purchasing a second home, or investing in commercial property, our team is here to ensure a smooth and compliant transaction.
Contact Us
For expert advice on LBTT and assistance with your property transaction, contact Gibson Kerr today. Our estate agent solicitors are ready to guide you through every step of the process.
Please note: Tax rates and regulations are subject to change. Always consult with a qualified professional for the most current information.