What is the Additional Dwelling Supplement (ADS) in Scotland and when do I pay it?

Full answer

The Additional Dwelling Supplement (ADS) is a surcharge on top of Scotland's Land and Buildings Transaction Tax (LBTT). It applies when, at the end of the transaction, you own more than one residential property and are not replacing your only or main residence. Typical triggers are buying a second home, a holiday home, or a buy-to-let property. Companies and other non-natural buyers can be liable from the first dwelling. ADS is charged on the full purchase price (subject to a minimum chargeable amount), not just the slice above a threshold, which makes it a meaningful extra cost on additional purchases. It is calculated as a flat percentage rate set by the Scottish Government; because the exact ADS rate and LBTT bands are not on our rate card, check the current figures on the Revenue Scotland website or use a Scottish LBTT calculator before budgeting. Who it affects: anyone in Scotland buying a property in addition to one they already own, including parents helping a child buy while keeping their own home, and landlords expanding a portfolio. A key relief exists for people moving home: if you buy a new main residence before selling the old one, you pay ADS up front, but you can reclaim it if you sell your previous main residence within the specified time limit. This makes timing and record-keeping important. ADS is separate from the rest of the UK -- England and Northern Ireland use SDLT with its own higher-rates surcharge, and Wales uses LTT. Because Scotland sets LBTT and ADS independently, do not assume English figures apply. To estimate your total Scottish purchase tax, use a Scotland-specific LBTT tool and confirm both the standard bands and the current ADS rate on gov.scot or Revenue Scotland.

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