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 the LBTT?

The Land and Buildings Transaction Tax (LBTT) is a tax you may need to pay when you buy a residential property or piece of land in Scotland. It applies to both freeholds and leaseholds, whether bought outright or with a mortgage.

Find everything you need to know about LBTT rates and how it works for first-time buyers, investors and existing homeowners in our guide.

How much is LBTT?

If your home costs up to £145,000, you won’t need to pay LBTT (£175,000 for first-time buyers). If it costs more, 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%

 

Example
Your new home costs £250,000. This is how your LBTT is calculated:

• 0% on the first £145,000 = £0
• 2% on the next £105,000 = £2,100
Total LBTT = £2,100

When do I pay LBTT?

You need to submit a Land and Buildings Transaction Tax return to Revenue Scotland within 30 days of the effective date.

How can I pay LBTT?

If you’re using a solicitor, they’ll submit the LBTT return to Revenue Scotland on your behalf. Or, you can do it online. Whatever you choose, you’re responsible for ensuring it’s submitted on time.

If you fail to submit it or you’re late, Revenue Scotland may charge you a penalty.

LBTT for first-time buyers

If you’re buying your first home and this will be your main residence, you may qualify for a relief. This means you won’t need to pay LBTT for homes of up to £175,000. If your property costs more than £175,000, you’ll only pay tax on the portion of the price above this threshold. You can claim the relief when submitting the LBTT return.

The below rates apply:

Purchase price LBTT rate
£0 to £175,000
0%
£175,001 to £250,000 
2%
£250,001 to £325,00 
5%
£325,001 to £750,000
10%
Over £750,000
12%

Example
Your new home costs £200,000. Your LBTT rate is:

• 0% on the first £175,000 = £0
• 2% on the remaining £25,000 = £500
Total LBTT = £500


READ our first time buyers guide 

LBTT for investors and existing homeowners

Whether you’re an investor or an existing homeowner, you’ll need to pay an extra 6% on second homes of more than £40,000. This is known as the ‘Additional Dwelling Supplement’ (ADS).

The following rates apply:

Property price LBTT rate
£0 to £40,000
0%
£40,000 to £145,000
6%
£145,001 to £250,000
8%
£250,001 to £325,000
11% 
£325,001 to £750,000
16%
£750,001+
18%

Example
Your second home or buy-to-let costs £145,000. Your LBTT is:

• 0% on the first £40,000 = £0
• 6% on the remaining £105,000 = £6,300
Total LBTT = £6,300

 

READ our investors guide

Is LBTT included in the mortgage payment?

No, LBTT is not typically included in the mortgage payment. It’s a one-time tax paid by the buyer on the property’s purchase price and is usually paid at the time of completion.

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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.

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