Glossary · UK
What is Land and Buildings Transaction Tax (LBTT)?
LBTT is the tax paid when you buy a residential or commercial property or land in Scotland, replacing Stamp Duty north of the border.
Full Definition
Land and Buildings Transaction Tax (LBTT) is the Scottish equivalent of Stamp Duty Land Tax, administered by Revenue Scotland and charged on purchases of property and land in Scotland. Like SDLT, it works as a progressive slice tax: each portion of the price falling within a band is taxed at that band's rate, so the rate rises only on the amount above each threshold rather than on the whole price. First-time buyers benefit from a relief that raises the nil-rate starting point, reducing or eliminating tax on lower-priced homes. Where you buy an additional dwelling, such as a second home or buy-to-let, the Additional Dwelling Supplement (ADS) of 8% applies on top of the standard LBTT, charged on the full purchase price above a low minimum. Returns must generally be filed and any tax paid within 30 days of the effective transaction date, usually completion. LBTT only applies in Scotland: buyers in England and Northern Ireland pay SDLT (0% to £125,000, then rising to 12% above £1.5m, with first-time buyer relief to £300,000), while purchasers in Wales pay Land Transaction Tax, which has no first-time buyer relief. Commercial and mixed-use transactions follow separate non-residential LBTT bands.