Key Points — Scotland LBTT 2025/26
- LBTT replaced Stamp Duty in Scotland from 1 April 2015 — it is administered by Revenue Scotland, not HMRC
- Progressive system — each band is taxed separately (you never pay the higher rate on the whole price)
- Nil-rate band: £145,000 for standard purchases (£175,000 for first-time buyers)
- Additional Dwelling Supplement (ADS): 6% on the total price for second homes and buy-to-lets (from April 2024)
- Filing deadline: 30 days from completion (longer than England’s 14 days)
- First-time buyer saving: up to £600 through the raised nil-rate threshold
What Is Land and Buildings Transaction Tax (LBTT)?
Land and Buildings Transaction Tax (LBTT) is the property purchase tax that applies in Scotland. It replaced UK Stamp Duty Land Tax (SDLT) on 1 April 2015, following the devolution of tax powers to the Scottish Parliament under the Scotland Act 2012. LBTT is collected and administered by Revenue Scotland, with support from Registers of Scotland.
Like SDLT in England and Northern Ireland, LBTT operates on a progressive or “slice” system. This means that different portions of the purchase price are taxed at different rates. You only pay the rate for each band on the amount that falls within that band — not on the entire purchase price. This is fairer than the old “slab” system that existed before 2015, where crossing a threshold by even £1 could dramatically increase your total tax bill.
LBTT applies to purchases of both residential and non-residential (commercial) land and buildings in Scotland. It also applies to certain leases. The rates and bands differ between residential and non-residential transactions. This guide focuses primarily on residential LBTT, which is what the vast majority of homebuyers and property investors in Scotland will encounter.
Who Has to Pay LBTT?
LBTT must be paid by the purchaser (buyer) of land or property in Scotland when the transaction is for £145,000 or more (for residential property) or £150,000 or more (for non-residential property). If you are buying a residential property in Scotland as an individual, a joint buyer, or through a company, LBTT is your responsibility. Your solicitor or conveyancer will normally handle the LBTT return and payment on your behalf.
The tax applies based on the location of the property, not where the buyer lives. So if you live in England but buy a property in Edinburgh, you will pay LBTT to Revenue Scotland rather than SDLT to HMRC. Similarly, a Scottish resident buying property in Manchester would pay SDLT, not LBTT.
How LBTT Differs From Stamp Duty (SDLT)
While LBTT and SDLT are broadly similar in concept, there are important differences that property buyers should understand, particularly those buying across borders or comparing the Scottish and English property markets:
- Different rate bands: Scotland has its own threshold amounts and rates, which are set by the Scottish Parliament
- Different nil-rate band: £145,000 in Scotland versus £125,000 in England (standard rates)
- Different first-time buyer relief: Scotland raises the nil-rate band to £175,000 (saving up to £600), while England raises it to £300,000 (saving up to £8,750)
- Higher additional property surcharge: Scotland’s ADS is 6% versus England’s 5% surcharge
- Longer filing deadline: 30 days in Scotland versus 14 days in England
- Different administration: Revenue Scotland handles LBTT; HMRC handles SDLT
- Lease taxation: LBTT has a unique “three-yearly review” system for non-residential leases
LBTT Rates for Residential Property 2025/26
The following LBTT rates apply to residential property purchases in Scotland for the 2025/26 tax year. These rates were set by the Scottish Parliament and are administered by Revenue Scotland.
| Up to £145,000 | 0% |
| £145,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
| Up to £175,000 | 0% |
| £175,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
Worked Example — Standard LBTT
A homeowner (not a first-time buyer) purchases a property in Glasgow for £350,000. Here is how the LBTT is calculated:
| Band | Taxable Amount | Rate | Tax Due |
|---|---|---|---|
| £0 – £145,000 | £145,000 | 0% | £0 |
| £145,001 – £250,000 | £105,000 | 2% | £2,100 |
| £250,001 – £325,000 | £75,000 | 5% | £3,750 |
| £325,001 – £350,000 | £25,000 | 10% | £2,500 |
| Total | £350,000 | £8,350 |
The effective tax rate on this £350,000 property is 2.39%. Compare this with England, where a £350,000 property would incur £7,500 in SDLT (effective rate 2.14%), making Scotland slightly more expensive at this price point.
Worked Example — First-Time Buyer
A first-time buyer purchases a flat in Edinburgh for £220,000:
| Band | Taxable Amount | Rate | Tax Due |
|---|---|---|---|
| £0 – £175,000 | £175,000 | 0% | £0 |
| £175,001 – £220,000 | £45,000 | 2% | £900 |
| Total | £220,000 | £900 |
Without first-time buyer relief, the same purchase would cost £1,500 in LBTT, so the relief saves £600. In England, a first-time buyer paying £220,000 would pay £0 in SDLT (as the nil-rate band is £300,000), making England considerably cheaper for first-time buyers at this price level.
Additional Dwelling Supplement (ADS)
The Additional Dwelling Supplement (ADS) is an extra charge that applies when you buy an additional residential property in Scotland, such as a second home, holiday home, or buy-to-let investment. The ADS is 6% of the total purchase price, charged on top of the standard LBTT rates.
When Does the ADS Apply?
The ADS applies when all of the following conditions are met:
- You are buying a residential property in Scotland for £40,000 or more
- At the end of the day of purchase, you own two or more residential properties anywhere in the world
- You are not replacing your only or main residence (subject to the 18-month replacement rule)
The ADS is calculated on the total purchase price, not just the amount above £40,000. For example, if you buy a second property for £200,000, the ADS alone would be £12,000 (6% of £200,000), payable on top of any standard LBTT.
Worked Example — ADS Purchase
An investor buys a buy-to-let property in Aberdeen for £250,000 while still owning their main residence:
| Component | Calculation | Tax Due |
|---|---|---|
| LBTT: £0 – £145,000 at 0% | £145,000 × 0% | £0 |
| LBTT: £145,001 – £250,000 at 2% | £105,000 × 2% | £2,100 |
| ADS: 6% of total price | £250,000 × 6% | £15,000 |
| Total Tax | £17,100 |
In this example, the ADS alone (£15,000) vastly exceeds the base LBTT (£2,100). The combined effective tax rate is 6.84%. In England, the same purchase would cost £14,750 (SDLT £2,500 plus 5% surcharge £12,500), making Scotland more expensive for additional property purchases by £2,350.
Reclaiming the ADS
You may be able to reclaim the ADS if you paid it because you had not yet sold your previous main residence at the time of purchasing your new home. The conditions for reclaim are:
- You sell your previous main residence within 18 months of buying the new property
- The new property is your intended main residence
- You submit the reclaim within five years of the filing date of the original LBTT return
- The reclaim is made by submitting an amended LBTT return to Revenue Scotland
ADS Exemptions
Certain transactions are exempt from the ADS or qualify for special treatment:
- Properties under £40,000: No ADS applies if the purchase price is below £40,000
- Replacing your main residence: If you sell your previous main residence on the same day or before buying the new one, ADS does not apply
- Inherited properties: Properties inherited within 18 months before the purchase may be disregarded in certain circumstances
- Separation or divorce: Special rules apply when property ownership changes due to the end of a marriage or civil partnership
- Uninhabitable properties: Properties that are genuinely uninhabitable may not count as a “dwelling” for ADS purposes, though Revenue Scotland applies strict criteria
Scotland LBTT Calculator
Use our free calculator to work out exactly how much LBTT you will pay on a Scottish property purchase. Select your buyer type using the tabs below.
| Band | Rate | Tax Due |
|---|
LBTT vs SDLT: Scotland vs England Comparison
One of the most common questions from property buyers is how Scottish LBTT compares with English SDLT. The answer depends significantly on the property price and your buyer status. Below is a detailed comparison at various price points.
Standard Purchase Comparison
| Price | Scotland LBTT | England SDLT | Difference |
|---|---|---|---|
| £150,000 | £100 | £500 | Scotland £400 cheaper |
| £200,000 | £1,100 | £1,500 | Scotland £400 cheaper |
| £250,000 | £2,100 | £2,500 | Scotland £400 cheaper |
| £300,000 | £4,600 | £5,000 | Scotland £400 cheaper |
| £350,000 | £8,350 | £7,500 | Scotland £850 more |
| £400,000 | £13,350 | £10,000 | Scotland £3,350 more |
| £500,000 | £23,350 | £15,000 | Scotland £8,350 more |
| £750,000 | £48,350 | £27,500 | Scotland £20,850 more |
| £1,000,000 | £78,350 | £41,250 | Scotland £37,100 more |
First-Time Buyer Comparison
The difference in first-time buyer relief between Scotland and England is stark. England offers a much more generous nil-rate band of £300,000 compared to Scotland’s £175,000. This means first-time buyers in England can purchase properties up to £300,000 completely tax-free, while Scottish first-time buyers start paying LBTT from £175,001.
| Price | Scotland LBTT (FTB) | England SDLT (FTB) | Difference |
|---|---|---|---|
| £175,000 | £0 | £0 | Same |
| £200,000 | £500 | £0 | Scotland £500 more |
| £250,000 | £1,500 | £0 | Scotland £1,500 more |
| £300,000 | £4,000 | £0 | Scotland £4,000 more |
| £350,000 | £7,750 | £2,500 | Scotland £5,250 more |
| £500,000 | £22,750 | £10,000 | Scotland £12,750 more |
As the table shows, Scotland’s first-time buyer relief is far less generous than England’s. The maximum saving in Scotland is just £600, compared to up to £8,750 in England. This is a significant factor for first-time buyers considering where to purchase.
Additional Property Comparison
Scotland’s Additional Dwelling Supplement of 6% is higher than England’s equivalent surcharge of 5%. This means buy-to-let investors and second-home buyers pay more in Scotland at every price point.
| Price | Scotland (LBTT + ADS) | England (SDLT + 5%) | Difference |
|---|---|---|---|
| £200,000 | £13,100 | £11,500 | Scotland £1,600 more |
| £300,000 | £22,600 | £20,000 | Scotland £2,600 more |
| £500,000 | £53,350 | £40,000 | Scotland £13,350 more |
First-Time Buyer LBTT Relief in Scotland
Scotland introduced first-time buyer LBTT relief on 30 June 2018, following a similar move by the UK Government for SDLT in England. The relief increases the nil-rate threshold from £145,000 to £175,000, providing a maximum saving of £600.
Eligibility Criteria
To qualify for first-time buyer LBTT relief in Scotland, you must meet all of the following conditions:
- Never previously owned property: You must not have previously owned a freehold or leasehold interest in a residential property, anywhere in the world. This includes property acquired through inheritance, gift, or previous purchase
- All buyers must qualify: If purchasing jointly, every buyer named on the disposition must be a first-time buyer. If even one buyer has previously owned property, the relief is lost for the entire transaction
- Main residence: The property must be purchased for use as your main residence. You cannot claim the relief on buy-to-let or second home purchases
- Individual buyers only: The relief is not available to companies, trusts, or other non-natural persons
How to Claim
First-time buyer relief is claimed on the LBTT return, which your solicitor submits to Revenue Scotland within 30 days of the effective date of the transaction. The relief is indicated by selecting the appropriate claim code on the return. If the relief was not claimed at the time of the original return, it may be possible to submit an amended return, though this should be done promptly.
Revenue Scotland: Administration and Compliance
Revenue Scotland is the tax authority responsible for the collection and management of LBTT. Established in 2015 under the Revenue Scotland and Tax Powers Act 2014, it is a non-ministerial department of the Scottish Government.
Filing and Payment
An LBTT return must be filed and any tax paid within 30 days of the effective date of the transaction (usually the date of completion or entry). This is longer than the 14-day deadline that applies to SDLT returns in England and Northern Ireland.
Key points about LBTT filing:
- Online filing: LBTT returns are submitted electronically through Revenue Scotland’s online portal (SETS — Scottish Electronic Tax System)
- Solicitor responsibility: In practice, your solicitor or conveyancer handles the return and arranges payment as part of the conveyancing process
- Penalties: Late filing attracts an initial £100 penalty, with additional penalties for continued non-compliance
- Interest: Late payment incurs interest at the rate set by Revenue Scotland
- Nil returns: A return must still be filed even if no tax is due, provided the transaction is notifiable
Notifiable Transactions
Not all property transactions require an LBTT return. A residential transaction is notifiable if the purchase price is £40,000 or more. Below this threshold, no return is required and no LBTT is payable. For non-residential transactions, the notification threshold is also £40,000.
Amendments and Corrections
If you discover an error in a filed LBTT return, or if circumstances change (for example, you become eligible for an ADS reclaim), you can submit an amended return. The time limit for amending a return is generally 12 months from the filing date, though certain amendments (such as ADS reclaims) have longer windows of up to five years.
Penalties and Enforcement
Revenue Scotland has broad powers to investigate and enforce LBTT compliance. These include:
- Power to issue information notices requiring taxpayers or third parties to provide documents or information
- Authority to carry out enquiries into LBTT returns
- Ability to issue assessments for additional tax where returns are inaccurate or incomplete
- Powers to impose penalties for late filing, late payment, and inaccurate returns
- A criminal offence of knowingly making a false LBTT return
Common LBTT Scenarios and Planning Considerations
Buying Before Selling Your Existing Home
One of the most common LBTT planning issues arises when you buy a new main residence before selling your current one. In this situation, you will temporarily own two properties, which means the ADS applies to your new purchase. However, you can reclaim the ADS if you sell your previous home within 18 months.
Planning tips for this scenario:
- Budget for the ADS upfront — you may need to fund an additional 6% of the purchase price at completion
- Set the sale of your previous property in motion as early as possible
- Keep records of your sale timeline carefully to support any reclaim
- Consider whether your mortgage lender will factor the ADS into affordability calculations
- Be aware that the 18-month clock starts from the effective date of your new purchase, not from when you list your old property
Married Couples and Civil Partners
For LBTT purposes (including the ADS), married couples and civil partners are treated as a single unit. This means that properties owned by either spouse count when determining whether the ADS applies. If one partner owns a property and the other is buying their first home, the ADS may still apply if the existing property is not being sold or replaced.
Company Purchases
Properties purchased by companies (including limited companies, LLPs, and partnerships with corporate members) are treated differently under LBTT. Company purchases of residential property worth £40,000 or more will always attract the ADS, as companies cannot claim first-time buyer relief or the main residence exemption.
Shared Ownership
For shared ownership properties in Scotland (purchased through housing associations), buyers can choose to pay LBTT on their initial share or on the full market value. If paying on the initial share only, subsequent staircasing transactions may incur additional LBTT. This choice should be discussed with your solicitor based on your likely future staircasing plans.
Mixed-Use Properties
If a property has both residential and non-residential elements (for example, a flat above a shop), it may qualify as a mixed-use transaction. Mixed-use transactions are subject to non-residential LBTT rates, which are generally lower than residential rates. This can result in significant savings, but Revenue Scotland will scrutinise any claim for mixed-use treatment.
History of Property Tax in Scotland
Understanding how Scotland arrived at LBTT helps put the current system in context and explains why rates and bands differ from the rest of the UK.
Before LBTT: Stamp Duty Land Tax (pre-2015)
Before 1 April 2015, property purchases in Scotland were subject to Stamp Duty Land Tax (SDLT), the same tax that still applies in England and Northern Ireland. SDLT was administered by HMRC and applied uniform rates across the UK. The old SDLT system used a “slab” structure, where the tax rate applied to the entire purchase price rather than just the amount above each threshold — creating sharp cliff edges at band boundaries.
Devolution and the Scotland Act 2012
The Scotland Act 2012 gave the Scottish Parliament the power to replace SDLT with its own property tax. This was part of a broader package of fiscal devolution that also included the ability to vary income tax rates. The Scottish Government developed LBTT as a progressive alternative to SDLT, intentionally designing it to avoid the cliff-edge problems of the slab system.
Key Timeline
- April 2015: LBTT introduced, replacing SDLT in Scotland
- April 2016: Additional Dwelling Supplement introduced at 3%
- January 2019: ADS increased from 3% to 4%
- June 2018: First-time buyer LBTT relief introduced
- December 2022: ADS increased from 4% to 6%
- April 2024: 6% ADS rate confirmed as permanent
Political Context
LBTT rates are set by the Scottish Parliament through the annual Budget process. Unlike England, where SDLT rates are set by the UK Chancellor, Scottish property tax rates are determined by MSPs at Holyrood. This means that Scottish property tax policy can diverge from the rest of the UK based on the priorities of the Scottish Government of the day. Recent debates have focused on whether the ADS rate of 6% is discouraging investment in Scottish property and whether first-time buyer relief should be made more generous.