Land and Buildings Transaction Tax (LBTT) Scotland 2026/27: Complete Guide

If you are buying property in Scotland, you pay Land and Buildings Transaction Tax (LBTT), not Stamp Duty Land Tax (SDLT). Administered by Revenue Scotland, LBTT has applied to Scottish property transactions since 1 April 2015. This guide covers everything you need to know about the 2026/27 rates, available reliefs, and how to calculate your bill.

LBTT Residential Rates 2026/27

LBTT is a progressive tax, meaning each band only applies to the portion of the purchase price that falls within it — not the whole price. This is sometimes called a "slice" system and it mirrors the way income tax works.

Worked Example: £300,000 Purchase

On a £300,000 property, the LBTT calculation works as follows:

• 0% on the first £145,000 = £0
• 2% on £105,000 (£145,001 to £250,000) = £2,100
• 5% on £50,000 (£250,001 to £300,000) = £2,500

Total LBTT: £4,600

Worked Example: £500,000 Purchase

• 0% on the first £145,000 = £0
• 2% on £105,000 = £2,100
• 5% on £75,000 (£250,001 to £325,000) = £3,750
• 10% on £175,000 (£325,001 to £500,000) = £17,500

Total LBTT: £23,350

First-Time Buyer Relief

First-time buyers purchasing a property up to £175,000 pay no LBTT at all. Above that threshold, the normal bands apply — but the nil-rate band effectively increases from £145,000 to £175,000, providing a saving of up to £600 compared with the standard rates.

To qualify, neither buyer (if purchasing jointly) must have previously owned a residential property anywhere in the world. You claim the relief via the LBTT return filed by your solicitor. There is no upper limit on the purchase price for using the relief, though the saving is capped at £600.

Additional Dwelling Supplement (ADS)

If you are buying an additional residential property — a buy-to-let, a holiday home, or a second home — you pay the Additional Dwelling Supplement (ADS) on top of standard LBTT.

The ADS rate is 6% of the total purchase price, charged from the first pound. It is not a progressive tax; it applies to the entire price.

ADS Worked Example: £250,000 Buy-to-Let

• Standard LBTT: £2,100
• ADS: 6% × £250,000 = £15,000

Total LBTT + ADS: £17,100

This compares to £0 SDLT on a residential property in England at the same price (assuming standard SDLT rates with the nil-rate band at £250,000), though England's buy-to-let 3% surcharge would bring that English bill to £7,500.

When Does ADS Apply?

ADS applies if, at the end of the day of the transaction, you own two or more residential properties. However, there are important exceptions:

• If you are replacing your main home (selling one property and buying another), ADS does not apply — provided you sold the previous main residence within 18 months, or sell it within 18 months of buying the new one, you can reclaim the ADS.
• Properties worth less than £40,000 are not counted for ADS purposes.
• Purchases by non-natural persons (companies, partnerships) also attract ADS.

Non-Residential LBTT Rates

For commercial property — shops, offices, land — different LBTT rates apply:

Commercial leases are also subject to LBTT, charged on the net present value of rent.

LBTT vs SDLT: Head-to-Head Comparison

From April 2025, England's SDLT nil-rate threshold returned to £125,000, having been temporarily at £250,000 since September 2022. Scotland's threshold of £145,000 remains unchanged.

Scotland's LBTT produces lower bills than SDLT on lower-value properties (up to around £350,000), but the higher 10% band (which kicks in at £325,001 in Scotland vs a different threshold in England) means LBTT becomes more expensive on mid-to-upper price ranges.

Filing Your LBTT Return

LBTT returns must be filed with Revenue Scotland within 30 days of the "effective date" of the transaction (usually completion). Your solicitor handles this as part of the conveyancing process. Late filing attracts a fixed £100 penalty plus further daily penalties for continued non-compliance.

Unlike SDLT, which is administered by HMRC, LBTT operates under Revenue Scotland's separate online portal (SETS — Scottish Electronic Tax System). Your solicitor will have access to this system and will submit the return and payment on your behalf.

Welsh Land Transaction Tax (LTT): A Note

Wales operates its own Land Transaction Tax (LTT), distinct from both LBTT and SDLT, administered by the Welsh Revenue Authority. If you are buying in Wales, you should check the LTT rates and bands separately.

Key Takeaways for Scottish Buyers in 2026

• Confirm whether ADS applies to your purchase before exchanging — it adds 6% to the bill and can be a significant surprise if overlooked.
• First-time buyers should ensure their solicitor claims the relief on the LBTT return; it is not automatic.
• Budget for LBTT as part of your total purchase costs — on a £400,000 property the bill is £17,150, which is a material addition to your deposit and legal fees.
• If you are selling a main residence and buying another, document the sale carefully to support an ADS reclaim if timing means you briefly own two properties.

Revenue Scotland's website provides an official LBTT calculator and updated guidance on reliefs and exemptions. For complex transactions — such as purchases involving mixed-use property or properties in multiple jurisdictions — independent legal and tax advice is recommended.