Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential land and buildings transactions (including commercial leases). The tax is payable at different rates on each portion of the purchase price within specified tax bands. The percentage rate for each band is applied only to the part of the property price that falls within that band. For example, someone buying a property for £280,000 would pay no LBTT on the value of the property up to £250,000 and then 5% of the value between £250,000 and £280,000. In this case the total LBTT paid would be £1,500.
Anyone buying an additional residential property in Scotland (such as a second home or a buy-to-let property) may also have to pay an Additional Dwelling Supplement (ADS) if the purchase price is £40,000 or more. In the example above, if the property was a second home the total amount of LBTT paid would be £1,500 PLUS ADS of £11,200 (4% of £280,000), so £12,700 in total. The rates and bands for LBTT are set out below:
| Purchase price of property |
Rate of Land and Buildings Transaction Tax (LBTT) (single or multiple residential properties)
|
| Up to £250,000 |
0% |
| £250,001 - £325,000 |
5% |
| £325,001 - £750,000 |
10% |
| Over £750,000 |
12% |
Properties under £40,000 are not subject to Additional Dwelling Supplement (ADS) but if ADS is due it is payable on the total purchase price.
Land and Buildings Transaction Tax (LBTT) is paid at different rates on residential property transactions and is dependent on the chargeable consideration (usually the purchase price) of your home. You don’t pay tax on the full amount, only the amount that falls into a certain band.
For example, a home costing £280,000 would be charged no LBTT on the first £145,000, 2% on the next £105,000, and 5% on the next £30,000, so you’d pay £3,600 in LBTT.
|
Purchase price of property
|
Standard LBTT rate
|
|
Up to £250,000
|
0
%
|
|
£250,001 - £325,000
|
5
%
|
|
£325,001 - £750,000
|
10
%
|
|
Over £750,000
|
12
%
|
First-time buyers can claim First-time Buyer relief. You can find out more about what a first-time buyer is on our website. Depending on the purchase price, this relief can reduce your LBTT bill by up to £600.
It means that homes with purchase prices up to £250,000 are effectively free from LBTT for first-time buyers.
For example:
|
Purchase price of property
|
Standard LBTT bill
|
Amount of First-time Buyer Relief
|
Total to pay for a first-time buyer
|
|
Up to £250,000
|
£0
|
£0
|
£0
|
|
Up to £250,000
|
£0
|
£0
|
£0
|
|
Up to £250,000
|
£0
|
£0
|
£0
|
|
Up to £250,000
|
£0
|
£0
|
£0
|
|
£325,500
|
£3,800
|
£0
|
£3,800
|
|
£750,500
|
£46,310
|
£0
|
£46,310
|
Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential land and buildings transactions (including commercial leases). The tax is payable at different rates on each portion of the purchase price within specified tax bands. The percentage rate for each band is applied only to the part of the property price that falls within that band. For example, someone buying a property for £280,000 would pay no LBTT on the value of the property up to £250,000 and then 5% of the value between £250,000 and £280,000. In this case the total LBTT paid would be £1,500.
Anyone buying an additional residential property in Scotland (such as a second home or a buy-to-let property) may also have to pay an Additional Dwelling Supplement (ADS) if the purchase price is £40,000 or more. In the example above, if the property was a second home the total amount of LBTT paid would be £1,500 PLUS ADS of £11,200 (4% of £280,000), so £12,700 in total. The rates and bands for LBTT are set out below:
| Purchase price of property |
Rate of Land and Buildings Transaction Tax (LBTT) (single or multiple residential properties)
|
| Up to £250,000 |
0% |
| £250,001 - £325,000 |
5% |
| £325,001 - £750,000 |
10% |
| Over £750,000 |
12% |
Properties under £40,000 are not subject to Additional Dwelling Supplement (ADS) but if ADS is due it is payable on the total purchase price.
