Question 1

What are the LBTT rates for 2026/27?

Accepted Answer

For residential property: 0% up to £145,000; 2% on £145,001–£250,000; 5% on £250,001–£325,000; 10% on £325,001–£750,000; 12% above £750,000. First-time buyers pay 0% on the first £175,000 instead of £145,000. Additional residential properties attract an 8% Additional Dwelling Supplement on the full purchase price (on top of the standard LBTT bands).

Question 2

What is the Additional Dwelling Supplement (ADS)?

Accepted Answer

ADS is an 8% surcharge on the full purchase price of additional residential properties — typically second homes, holiday homes, or buy-to-let purchases. It applies if the purchase price exceeds £40,000. It is charged on the total price, not just the excess above £40,000. ADS was increased from 6% to 8% in December 2024.

Question 3

Can I reclaim ADS after selling my main home?

Accepted Answer

Yes. If you buy a new main residence before selling your previous one, you must pay ADS at the time of purchase. However, if you sell your previous main residence within 36 months of buying the new one, you can claim a full refund of the ADS paid. The refund must be claimed within 12 months of selling the previous home.

Question 4

What is the LBTT threshold for first-time buyers in Scotland?

Accepted Answer

First-time buyers in Scotland benefit from a higher nil-rate threshold of £175,000 (versus the standard £145,000). Above £175,000, the standard residential LBTT rates apply. There is no upper property value limit on first-time buyer relief in Scotland — unlike in England where relief is withdrawn on properties over £500,000.

Question 5

Does LBTT apply to non-residential property in Scotland?

Accepted Answer

Yes, but at different rates. Non-residential (commercial) LBTT uses three bands: 0% up to £150,000; 1% on £150,001–£250,000; 5% above £250,000. There is no additional surcharge equivalent to ADS for non-residential property. Mixed-use properties (partly residential, partly commercial) are taxed under the non-residential rates.

Question 6

When do you pay LBTT?

Accepted Answer

LBTT must be paid and a return submitted to Revenue Scotland within 30 days of the effective date of the transaction (usually the date of completion). Your solicitor will normally handle the LBTT return and payment as part of the conveyancing process. Failure to file on time results in automatic penalties and interest charges.

Question 7

How does LBTT compare to stamp duty in England?

Accepted Answer

Scotland's LBTT and England's SDLT have different band structures. LBTT's standard nil-rate threshold is £145,000, while England's is £125,000. For first-time buyers, Scotland's threshold is £175,000 versus England's £300,000, making FTB relief more generous in England for properties in that range. The LBTT top rate is 12% (above £750k), the same as SDLT. The ADS surcharge (8%) is higher than England's additional-home SDLT surcharge (5%).

LBTT Calculator Scotland 2026/27 — Land and Buildings Transaction Tax