What is the land and buildings transaction tax, and when does it need to be paid?
When you buy a property in Scotland, a land and buildings transaction tax (LBTT) is applied. Whether the property is residential or non-residential, each property has a different rate, depending on its price.
Here is a guide showing you the rates and bands determined by the Scottish Government for 2022-23. You can also use a
calculator to find out how high the LBTT would be for your particular property.
|
Price threshold for property & land
|
LTT rate
|
| up to and including £225,000 |
0% |
| over £225,000 up to and including £400,000 |
6% |
| over £400,000 up to and including £750,000 |
7.5% |
| over £750,000 up to and including £1,500,000 |
10% |
| over £1,500,000 |
12% |
Source: https://www.gov.scot/policies/taxes/land-and-buildings-transaction-tax/ (03.2023)
For example, if you buy a property worth £250,000 in March 2023, the total LBTT you pay is £2,100:
0% on the first £145,000, you pay £0
2% on the final £105,000, you pay £2,100
The total LTT to pay is £2,100
Under the Law Society of Scotland, all tax proceeding have to go through a solicitor, meaning that they complete your LBTT return to Revenue Scotland so that you don’t need to worry about it. This must be submitted
within 30 days of the effective date. Contact your
local branch to find out more.
Exemptions and variations
If you’re a first-time buyer, different rates apply, meaning you remain within the 0% band of LBTT up to a property value of £175,000.
If you’re purchasing an additional property to your current one, this second property falls under the
LBTT Additional Dwelling Supplement (ADS). This means that in addition to the normal LBTT amount, buyers will be charged 6% where the purchase price of the additional dwelling is over £40,000.
Certain special rates also apply to other special circumstances, for example to non-residents or leases. Read more about any variations or exemptions on the
Revenue Scotland website.
It’s also good to be aware that if you’re looking to buy in England, a different system applies. Read more about England’s Stamp Duty Land Tax
here. For Wales, you’ll find more information on their Land Transaction Tax
here.
If you have any queries around Land and Building Transaction Tax,
get in touch today and we can get your questions answered.
