Terms and conditions for the Land and Buildings Transaction Tax (LBTT). See the main LBTT page for price ranges and rates.

1. Administration of LBTT

Revenue Scotland will administer LBTT, supported by Registers of Scotland.

2. Exemptions from LBTT

Schedule 1 to the LBTT Act sets out the exemptions that will be available under LBTT.

These include:

  • Transactions for which there is no chargeable consideration. What constitutes the chargeable consideration for the purposes of a land transaction is set out in Schedule 2 to the Act.  Paragraph 1 of Schedule 2 provides that the chargeable consideration is, unless otherwise provided, any consideration in money or money’s worth for the transaction.
  • Acquisitions by the Crown
  •  Transfers of property on divorce, separation or the end of a civil partnership
  •  Grants of residential leases (other than 'qualifying leases' which are due to convert to ownership under the Long Leases (Scotland) Act 2012)
  •  Property transferred to a person in relation to the will of a deceased person or the intestacy of a deceased person.
3. Tax reliefs from LBTT

Certain reliefs from LBTT are provided for in schedules 3 - 16 to the LBTT Act:


  •  Sale and Leaseback arrangements – the leaseback element is not charged to avoid double counting (Schedule 3)
  •  Where a developer or property trader buys a residential property in part exchange for a new residential property (Schedule 4)
  •  Transfers involving multiple dwellings (Schedule 5)
  •  Certain acquisitions by Registered Social Landlords (Schedule 6)
  •  Where Alternative Finance Products (Schedule 7) and Alternative Finance Investment Bonds (AFIB) (Schedule 8) are used (which includes Islamic finance transactions) to ensure that they aren’t taxed more than conventional loans.
  •  Crofting community right to buy (Schedule 9)
  •  Group relief which enables groups to move property between companies for commercial reasons without having to consider stamp duty land tax implications (Schedule 10)
  •  Certain transactions in connection with the reconstruction and acquisition of companies (Schedule 11)
  •  On the incorporation of limited liability partnerships (Schedule 12)
  •  Charities and charitable trusts, subject to certain conditions (Schedule 13)
  •  Where compulsory purchase orders are used by a local authority (Schedule 14)
  •  Land transactions resulting from compliance with planning obligations such as requiring a developer to provide affordable housing (Schedule 15)
  •  Transfers involving public bodies (Schedule 16)


  • All of these reliefs are currently available under SDLT.

4. Application of LBTT to Leases

LBTT will be applied to non-residential leases.  Residential leases are only subject to LBTT where an ultra-long lease exceeding 175 years exists, albeit such leases will convert to ownership under the Long Leases (Scotland) Act 2012. Licences to occupy property are exempt interests, except licences that are of a description prescribed by Scottish Ministers under section 53(1) of the LBTT Act.  Please see the consultation on subordinate legislation for further information regarding licences.


The chargeable consideration includes rent and other monies, such as a premium, payable over the term of the lease (Schedule 19 Part 1).  The amount of tax chargeable is determined by calculating the net present value (NPV) and applying the relevant tax rates (Schedule 19 Part 2).


The taxpayer must review the amount of tax paid on every third anniversary of the lease and submit a return to the tax authority to ensure the correct tax is paid (Schedule 19 Part 4).

5. LBTT - Key concepts
  • land transaction is the acquisition of a chargeable interest (section 3).

  • chargeable interest is a real right or other interest in or over land in Scotland, such as such as the ownership of a house, or the benefit of an obligation, restriction or condition affecting the value of any such interest, right or power, which is not an exempt interest (section 4).

  • A land transaction is a chargeable transaction (i.e. a transaction that is taxed) unless it is an exempt transaction or a tax relief is claimed (known as ‘exempt from charge’) (section 15).

  •  The chargeable consideration (i.e. the price of the transaction) in a land transaction is provided for in Schedule 2 and includes money or money’s worth.

  •  A land transaction is notifiable to the Tax Authority, unless the transaction is exempt or if the chargeable consideration is less than £40,000 (section 30).

  •  The effective date of the land transaction is the date of completion of the land transaction, or another date as Scottish Ministers prescribe by regulations (Section 63).

  •  In order to ensure that LBTT is paid, the LBTT Act makes special provision for certain scenarios:-

 1. Section 9(2) provides for the scenario in which a contract is completed without substantial performance, for instance when the contract is complete, but the buyer is yet to take possession of the subjects.  The effective date of the land transaction is the date of completion.

 2. Section 10(2) provides for the scenario when a contract is substantially performed, but not completed.  For instance, when a tenant has taken possession and is paying rent, however, the lease documentation has not been completed.  The effective date is the date when the contract is substantially performed.

 “Substantial performance” is defined  in section 14 of the LBTT Act as the first event of any of the following and will trigger the charge to tax irrespective of completion of the contract:

 1. The buyer taking possession of whole or substantially the whole of the subject matter of the transaction,

 2. When a 'substantial amount of the consideration' is paid or provided, or

 3. An assignation or subsale or other transaction in which a third party takes possession occurs.