Is the second-home surcharge cheaper in Wales under LTT or in Scotland under ADS in 2026/27?

Full answer

The two regimes work differently, so the cheaper one depends entirely on the purchase price. In Scotland, the Additional Dwelling Supplement (ADS) is charged at a flat 8% of the entire purchase price once the property costs £40,000 or more, payable on top of standard Land and Buildings Transaction Tax (LBTT). Because it is a single percentage applied to the whole consideration rather than to the slice above a threshold, ADS rises steeply and predictably: a £300,000 second home attracts £24,000 of ADS alone, before the underlying LBTT is added. In Wales, second homes and buy-to-let purchases pay Land Transaction Tax (LTT) higher residential rates rather than a separate surcharge bolted on top. LTT higher rates are banded, meaning each portion of the price is taxed at its own rate as the price climbs through successive bands, and the surcharge element is built into those bands rather than levied as one flat percentage of the full price. Wales has no first-time buyer relief, and the higher rates apply to the whole transaction value within each band. The practical upshot: at lower prices the Welsh banded structure can produce a smaller bill than Scotland's flat 8%, because the lowest band carries a lower effective rate, whereas Scotland's ADS hits the full price uniformly. At higher prices the position can reverse, as Wales's top bands climb above Scotland's flat charge. There is no universal answer, so model your specific price in each regime. Regional note: England and Northern Ireland use SDLT with its own higher-rate surcharge for additional dwellings, which differs again from both LTT and LBTT. Always check the current band thresholds for the country where the property sits, as the devolved rates and thresholds are set independently and reviewed each year.

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