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
Land and Buildings Transaction Tax (LBTT) is a tax you may need to pay when buying a residential property or piece of land in Scotland. It applies to both freeholds and leaseholds, whether purchased outright or with a mortgage.
If you want to know more about LBTT, we’re here to help. This guide explores how and when to pay LBTT and the different rates for first-time buyers, existing homeowners and property investors.
LBTT rates
If your home costs up to £145,000, you won’t need to pay LBTT (£175,000 for first-time buyers). Otherwise, these are the rates:
| 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?
To pay LBTT, you’ll need to make an LBTT return to Revenue Scotland within 30 days of the sale being complete.
How can I pay LBTT?
Solicitors can submit your LBTT return to Revenue Scotland. If you’re not using a solicitor, you can submit it online yourself. If you fail to submit it or you’re late, Revenue Scotland may charge you a penalty.
LBTT for first-time buyers
Buying your first home? You may qualify for relief. This means you won’t need to pay LBTT for homes of up to £175,000. If your property costs more than this amount, 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 following 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
LBTT on second homes
Property investors and existing homeowners need to pay an extra 6% on second homes of more than £40,000. This is known as the ‘Additional Dwelling Supplement’ (ADS).
Below are the LBTT rates:
| Purchase 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
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LBTT FAQs
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LBTT exemptions: Certain property transactions, such as transfers between spouses or civil partners, can be exempt from LBTT.
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As of April 2021 the LBTT rates in Scotland are:
- 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%
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Yes, first-time buyers in Scotland are required to pay LBTT if the property they are buying costs more than £175,000. However, if the property costs more than £175,000, you will need to pay LBTT but you will be able to claim relief on the first £175,000 of the price.
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LBTT is typically paid upfront and is not added to the mortgage amount.
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