Land and Buildings Transaction Tax (LBTT), Scotland
LBTT is the Scottish equivalent of Stamp Duty, and is the tax charged by the Government in Scotland when you buy a home
What is LBTT?
Land and Buildings Transaction Tax (LBTT) is the tax charged by the Government in Scotland when you buy a home of more than £145,000.
Why do we have to pay it?
When you buy a property the change in land ownership has to be legally registered at the Land Registry. This process requires a certificate from Revenue Scotland – which they will only issue on receipt of the LBTT payment due on the purchase of the property.
The transfer of funds to pay the LBTT will be managed for you by your solicitor.
How much is LBTT?
For homes over £145,000 there is no LBTT to pay on the first £145,000, then the following rates apply:
|
Purchase price |
LBTT rate |
|
£0 to £145,000 |
0% |
|
£145,001 to £250,000 |
2% |
|
£250,001 to £325,00 |
5% |
|
£325,001 to £750,000 |
10% |
|
Over £750,000 |
12% |
What if I'm a first time buyer?
If you are a first time buyer, there is no LBTT to pay on the first £175,000, then the following rates apply:
|
Purchase price |
LBTT rate |
|
£0 to £175,000 |
0% |
|
£145,001 to £250,000 |
2% |
|
£250,001 to £325,000 |
5% |
|
£325,001 to £750,000 |
10% |
|
Over £750,000 |
12% |
What if I'm an investor or own more than one property?
If you are buying an investment property or an additional home in Scotland, you will need to pay the standard rates of LBTT, as well as the Additional Dwelling Supplement (ADS) which is an extra 4% on the total purchase price of the property. The following rates will apply:
|
Purchase price |
LBTT rate |
|
£0 to £145,000 |
4% |
|
£145,001 to £250,000 |
6% |
|
£250,001 to £325,000 |
9% |
|
£325,001 to £750,000 |
14% |
|
Over £750,000 |
16% |
LBTT FAQs
-
In Scotland, LBTT does not need to be paid on a new property in Scotland if it is valued at £145,000 or below. Additionally, first time buyers are exempt from LBTT on a new property valued at £175,000 or below.
-
The current LBTT rates in Scotland as of April 2021 are as follows:
- 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%
-
Yes, LBTT is required for first-time buyers in Scotland if the property costs more than £175,000, however, you'll only pay tax on the portion above of the price above £175,000, so you still receive the relief on the first £175,000.
-
No, LBTT is not typically included in the mortgage payment. It is a one-time tax paid by the buyer on the purchase price of the property and is usually paid at the time of completion.
