Quick Guide to LBTT

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Our quick guide to Land & Buildings Transaction Tax (LBTT)

They say its one of the only certainties in life, so here is our quick guide to tax on your new home.

When buying a residential property in Scotland with a value greater than £145,000 you will be liable to pay a tax calculated on the value of the property. This tax is called Land & Buildings Transaction Tax or LBTT for short.

LBTT is calculated using a banding system, with different rates applied to at each new band on the property’s value.

£0 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%

For example, if you buy a house for £450,000, the LBTT you will pay is calculated as:

0% on the first £145,000 = £0

2% on the next £105,000 = £2,100

5% on the next £75,000 = £3,750

10% on the final £125,000 = £12,500

Total LBTT = £18,350

For other purchase prices, here is a link to Revenue Scotland’s LBTT Calculator

If you already own a property and are looking to buy another, as a second home or buy-to-let for example, you will likely be liable to pay an Additional Dwelling Supplement. The ADS is equivalent to an extra 4% on the entire value of the property.

In our previous example of a £450,000 purchase price, adding ADS takes the total from £18,350 to £36,350 – an additional £18,000.

There are exemptions available in certain circumstances, such as buying a new main residence, which are beyond the scope of this article. For more info, please see Revenue Scotland’s Exemptions & Relief from the ADS. You may also be able to claim the ADS back if you sell your original property within 18 months of purchasing your new home.

If you are a First Time Buyer purchasing a property you intend to live in as your main residence then you will likely be eligible for First Time Buyer relief on your LBTT payment. If you qualify, you will pay no LBTT on the first £175,000 of the purchase price of your new home. Everything above this will be calculated in the same way as we described before. In practical terms, this will save you £600 on any purchase above the £175,000 limit!

Don’t worry, your conveyancing solicitor will calculate the amount of LBTT due and request funds from you for this accordingly. They will submit a Land & Buildings Transaction Tax return on your behalf when the transaction is due to settle.


We hope this has been a useful Quick Guide to LBTT for you. For more information please get in touch with us as we can connect you with one of our panel IFA’s or Solicitors who will be happy to give you free advice on your individual circumstances.

Oh and before we go, keep an eye out for deals on the Robertson Homes development you’re interested in – we may just be offering to pick up the LBTT tab for you!

If you still have any questions please contact a member of the Robertson Homes team who are always on hand to provide more information.

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