Land and Buildings Transaction Tax
What is Land and Buildings Transaction Tax?
Land and Buildings Transaction Tax (LBTT) is a tax applied to purchases of land or property, both residential and non-residential, and to non-residential leases in Scotland.
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. The 2013 Act has since been amended through the use of primary and secondary legislation.
An example of when you may pay this tax is when you purchase a new home. The tax is payable at different rates on each portion of the purchase price within specified tax bands.
Additional LBTT information
LBTT is administered by Revenue Scotland, with support from Registers of Scotland (RoS).
In addition to LBTT, the 6% Additional Dwelling Supplement may apply.
Detailed information, including guidance on how to submit or amend an LBTT return, guidance on reliefs and exemptions, and worked examples can be found on the Revenue Scotland website.
Tax calculators based on current rates and statistics on LBTT transactions and revenues are also available.
Residential LBTT
The residential LBTT rates and bands are set out in the table below. As confirmed in the Scottish Budget, these will remain unchanged in 2022-23.
|
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.
The relief will result in a reduction in tax payable of up to £600 for qualifying first-time buyers.
More information, including first-time buyer FAQs, is available on the Revenue Scotland website.
Additional Dwelling Supplement
The LBTT Additional Dwelling Supplement (ADS) came into force on 1 April 2016. The ADS is charged at 6%, and is payable on the total purchase price of an additional dwelling if the relevant consideration (usually the purchase price) is £40,000 or more. The 6% rate will apply to transactions entered into on or after 16 December 2022. For transactions entered into on or before 15 December 2022, the previous 4% rate will apply.
The ADS is 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
The non-residential LBTT rates and bands are set out in the tables below. As confirmed in the Scottish Budget, these will remain unchanged in 2022-23.
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% |
LBTT on lease premiums is payable at the same rate and in the same bands as non-residential conveyances.