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Land and Buildings Transaction Tax

The Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential land and buildings transactions (including commercial leases).

LBTT is administered by Revenue Scotland, with support from Registers of Scotland (RoS).

LBTT replaced UK Stamp Duty Land Tax in Scotland on 1 April 2015, following the passage of the Scotland Act 2012 and the subsequent Land and Buildings Transaction Tax (Scotland) Act 2013. This has since been amended through the use of primary and secondary legislation.

Tax is payable at different rates on each portion of the purchase price within specified tax bands.

Detailed information, including worked examples, guidance on reliefs and exemptions, tax calculators based on current rates, and monthly revenues can be found on the Revenue Scotland website.

Residential LBTT

Rates from 15 July 2020 to 31 March 2021

For transactions where the effective date is between 15 July 2020 and 31 March 2021 (inclusive of these dates), the temporary increase in the nil rate band to £250,000 introduced in July 2020 will apply. In general terms, the effective date is usually the moving in date or the date when keys to a property are obtained.

Rates and bands for these transactions are as follows:

Purchase price

LBTT rate

Up to £250,000

0%

£250,001 to £325,000

5%

£325,001 to £750,000

10%

Over £750,000

12%

Rates from 1 April 2021

The Scottish Budget 2021-2022 confirmed that the ceiling of the nil rate band for residential LBTT will return, as planned, to £145,000 for transactions with an effective date after 31 March 2021.

Rates and bands as of 1 April 2021 will therefore be as follows:

Purchase price

LBTT rate

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%

First-Time Buyers

A relief for first-time buyers is available, which increases the residential nil rate band of LBTT to £175,000. This currently has no practical effect due to the temporary (to 31 March 2021) nil rate band increase for all buyers.

From 1 April 2021, the availability of the relief will result in a reduction in tax of up to £600 for first-time buyers.

More information including first-time buyer FAQs is available on the Revenue Scotland website.

Additional Dwelling Supplement

On 1 April 2016 the LBTT Additional Dwelling Supplement (ADS) came into force, payable on the total purchase price of an additional dwelling of £40,000 or more.

The ADS is charged at 4% of the total purchase price of the dwelling.

The supplement forms an important element of the Scottish Government’s drive to protect opportunities for first-time buyers in Scotland, reinforcing the progressive approach in place for LBTT rates and bands.

Further information and guidance regarding the ADS is available on the Revenue Scotland website.

Non-residential LBTT

Non-residential LBTT rates and bands are set out in the tables below. No changes to these rates were announced as part of Scottish Budget 2021-22.

Conveyances

Purchase price

LBTT Rate

Up to £150,000

0%

£150,001 to £250,000

1%

Over £250,000

5%

Leases

NPV of rent payable

LBTT Rate

Up to £150,000

0%

£150,001 to £2 million

1%

Over £2 million

2%

Other Scottish Budget 2021-22 updates

Investment Related Reliefs

The Scottish Government announced in the Scottish Budget 2021-22 that, as a result of the impact of COVID-19 and the continued uncertainty around the terms of the UK’s future relationship with the EU, it has not been possible to issue a planned consultation on legislation to provide for proposed targeted LBTT reliefs related to: the ‘seeding’ (initial transfer) of properties into a Property Authorised Investment Fund (PAIF) or Co-owned Authorised Contractual Scheme (CoACS); and the exchange of units within a CoACS.

This will now be a matter for the next Scottish Parliament.