Our brief guide on what LBTT is, and how and when it is paid.

What is LBTT?

LBTT replaced Stamp Duty Land Tax (SDLT) on purchases involving land in Scotland from 1st April 2015.  LBTT is collected by the Scottish tax authority, Revenue Scotland.

LBTT is charged at progressive rates, like income tax, this means that the relevant rates will apply to the total value of the purchase in bands as detailed below.

What are the tax bands?

The rate of LBTT on residential purchases is as follows:-
0% up to £145,000

  • 2% between £145,001 and £250,000
  • 5% between £250,000 and £325,000
  • 10% between £325,000 and £1 million
  • 12% on the remainder of the price over £1 million.

When is LBTT paid?

LBTT is payable when the purchase completes and the LBTT return is submitted to Revenue Scotland. If the LBTT return has not been submitted and paid, the Keeper of the Registers of Scotland will not register the ownership document for your new property.

What about second homes?

Where a property is purchased as a second home, or by a Company, the Additional Dwelling Supplement (ADS) is also payable.  This is a one off payment of 4% of the purchase price of the property (where the price is in excess of £40,000).  It can be repayable in certain circumstances, such as where a property is purchased as a main residence and the previous main residence is sold within eighteen months.

I’m a first time buyer, how does it apply to me?

First time buyers are subject to LBTT exemptions, they pay no LBTT until the value of the property they purchase is over £175,000.  If a first time buyer purchases a property over the price of £175,000, the remainder of the tax calculation is a tiered calculation, as follows:

£175,000-£250,000                 2%
£250,001-£325,000                 5%
£325,001-£750,000                 10%
£750,001+                               12%

In order to qualify for this tax relief:

  • The purchaser must not have held any interest in any property anywhere in the world.
  • In the case of a couple purchasing together, both must be first time buyers in order to benefit.
  • The property that is being purchased must also be the purchaser’s main residence.

We can help.

If you require further information, or are looking for advice on a property purchase, please contact our conveyancing department on 01224 564636 and have a look at our properties here


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