Understanding Scottish property tax

A plain-English guide to LBTT and ADS — what they are, who pays them, and how they're calculated.

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What is LBTT? What is ADS? The five buyer scenarios Frequently asked questions Glossary

What is LBTT?

Land and Buildings Transaction Tax is Scotland's version of stamp duty. It's paid by the buyer whenever a property changes hands, and it's calculated in bands — meaning different portions of the price are taxed at different rates. The bands and rates depend on which of the five scenarios below applies to your purchase.

What is ADS?

The Additional Dwelling Supplement is an extra 8% charge added when you already own a property and you're buying another one. It applies to the full purchase price, not just a portion of it — and it can be reclaimed from Revenue Scotland if you sell your previous home within 36 months.

The five buyer scenarios

Standard purchase

For your main home. Standard LBTT bands apply, with 0% on the first £145,000.

First-time buyer

Higher 0% threshold of £175,000, saving up to £600 compared to a standard purchase.

Additional dwelling

Buy-to-let or second homes. Standard LBTT plus 8% ADS on the full price.

6+ dwellings

Portfolio purchases of six or more properties in one transaction. Non-residential rates apply, and ADS is not payable.

Non-residential

Shops, offices, agricultural land, and mixed-use property. Commercial bands apply, with no ADS.

Frequently asked questions

When is LBTT due?

LBTT must be paid, and a return submitted to Revenue Scotland, within 30 days of the effective date of your transaction — usually the completion date. Your solicitor will normally handle this for you as part of the conveyancing process.

Can I get ADS refunded?

Yes. If you buy a new main residence before selling your previous one, you'll pay ADS upfront — but you can reclaim it if you sell the previous home within 36 months of the new purchase. The reclaim must be requested from Revenue Scotland.

Who actually pays LBTT?

The buyer pays LBTT, not the seller. It's collected as part of the property transaction, typically arranged by your solicitor and paid from the funds you provide for completion.

Is there a minimum purchase price below which no tax is due?

For a standard purchase, no LBTT is due below £145,000 (£175,000 for first-time buyers). However, you must still file an LBTT return for any purchase over £40,000, even if no tax is owed. ADS applies to any additional dwelling purchase over £40,000, charged on the whole price.

Glossary

LBTT

Land and Buildings Transaction Tax

ADS

Additional Dwelling Supplement

Effective date

Usually the completion date

BTL

Buy-to-let property

This guide is for general information only and does not constitute legal or financial advice. Always consult a qualified solicitor before proceeding with a property purchase.

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