What is LBTT?

Land and Buildings Transaction Tax (LBTT) is the tax payable on the first £145,000 of a new home in Scotland. It applies to all buyers of residential and commercial property and land (including transactions for commercial properties and commercial leases) where a chargeable interest is acquired.

LBTT has been designed so that the tax bands used are more proportionate to the actual price of the property. So, the percentage rate for each band in LBTT is applied only to the part of the price over the relevant threshold and up to the next threshold.

To end the story, if you buy a property that is priced less than the threshold, there’s zero LBTT to pay. Happy days.

How much is Land and Buildings Transaction Tax in Scotland?

There’s a lot to do and think about when buying a new home, so to make life easier, the helpful table below outlines what you’ll need to pay in Land and Buildings Transaction Tax.

(Please note: For homes over £145,000 there is no LTT to pay on the first £145,000, then the following rates apply):

First time buyer? Read this.

There is a relief in place for you – and an increase that means you’ll pay nothing under LBTT tax Scotland for a property with a purchase price of less than £175,000.

This could mean a reduction in tax payable of up to £600 for qualifying first time buyers.

Additional dwelling supplement

The LBTT Additional Dwelling Supplement (ADS) has been in force since 1 April 2016. The ADS is charged at 6% and is payable on the total purchase price of an additional or second property, if the relevant consideration (usually the purchase price) is £40,000 or more.

Why was ADS put in place? That’s all down to the Scottish Government, who wanted to help protect property purchasing opportunities for Scotland’s first time buyers. Now that’s good news.