Pillar Guide - Property - 2026/27

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

Buying property in Scotland means paying Land and Buildings Transaction Tax rather than Stamp Duty Land Tax. This guide explains the residential bands, first-time buyer relief, the Additional Dwelling Supplement, and how the numbers compare with the rest of the UK.

Updated 1 July 2026

Key Facts

Nil-rate threshold: £145,000 (£175,000 for first-time buyers)

Top marginal rate: 12% above £750,000

Additional Dwelling Supplement: 8% from the first pound

Administered by: Revenue Scotland

Return required above: £40,000 purchase price

Payment deadline: 30 days from settlement

What LBTT Is

Land and Buildings Transaction Tax replaced Stamp Duty Land Tax in Scotland from 1 April 2015, following devolution of tax on land transactions under the Scotland Act 2012. It is a self-assessed tax administered by Revenue Scotland, Scotland's dedicated tax authority, rather than HMRC. LBTT applies to the purchase or lease of both residential and non-residential land and buildings located in Scotland.

Unlike SDLT and LTT, LBTT was designed from the outset as a progressive slab-and-slice tax, meaning each band of the price is taxed at its own rate rather than the whole price being taxed at a single rate once a threshold is crossed. This structure has remained broadly stable since 2015, with periodic rate and threshold changes announced in the Scottish Budget.

Residential Bands and Rates

The standard residential LBTT bands for 2026/27 are:

£0 to £145,000: 0%
£145,000 to £250,000: 2%
£250,000 to £325,000: 5%
£325,000 to £750,000: 10%
Above £750,000: 12%

As with SDLT, only the portion of the price falling within each band is taxed at that band's rate, so the effective overall rate paid is always lower than the top marginal rate that applies to the final slice of the price.

First-Time Buyer Relief

First-time buyers purchasing a property to live in as their only or main residence benefit from a raised nil-rate threshold of £175,000, rather than the standard £145,000. The 2% band then runs from £175,000 to £250,000, with the 5%, 10% and 12% bands unchanged above that. There is no cap on the purchase price for the relief to apply, unlike the £500,000 ceiling under the equivalent SDLT relief in England.

To qualify, the buyer (and any joint buyer) must never have owned a dwelling anywhere in the world, and the property must be intended as their main residence. Buyers should confirm eligibility with their solicitor before completion, as the relief must be claimed on the LBTT return.

Additional Dwelling Supplement

The Additional Dwelling Supplement (ADS) is an extra 8% charged on the entire purchase price of a residential property, from the first pound, where the buyer already owns one or more other dwellings and is not simply replacing their main residence. It was increased from 6% to 8% in December 2024 and applies to buy-to-let purchases, second homes, and most purchases by companies.

A buyer who is selling their previous main residence but has not yet completed that sale by the time they buy their new home will usually still pay the ADS upfront, but can reclaim it from Revenue Scotland if the previous home is sold within 18 months of the new purchase.

LBTT vs SDLT and LTT

England and Northern Ireland use SDLT, with a nil-rate band of £125,000 and a first-time buyer nil-rate band up to £300,000 (capped at a £500,000 purchase price). Wales uses LTT, with a nil-rate band of £225,000 and no first-time buyer relief. LBTT sits between the two on the standard nil-rate threshold but applies a steeper 10% band from £325,000, which can make it more expensive than SDLT for mid-market family homes despite the higher starting threshold.

All three taxes apply an additional-property surcharge, but at different rates: 5% under SDLT, 8% under LBTT, and a banded surcharge of up to 17% under LTT depending on the price. Buyers moving between nations should not assume figures are transferable and should always recalculate using the relevant devolved tax.

Worked Example

Fiona is buying a flat in Edinburgh for £280,000 as her only home, and is not a first-time buyer. The first £145,000 is taxed at 0% (£0), the next £105,000 (up to £250,000) is taxed at 2% (£2,100), and the remaining £30,000 (up to £280,000) is taxed at 5% (£1,500). Her total LBTT bill is £3,600.

If Fiona were instead buying a £280,000 buy-to-let while already owning her main home, the 8% ADS would apply to the full £280,000 (£22,400) on top of the standard LBTT calculated above, taking her total bill to £26,000.

Common Pitfalls

Assuming SDLT rates apply. Buyers relocating to Scotland sometimes budget using SDLT thresholds, which can significantly understate or overstate the actual LBTT due.
Missing the ADS reclaim window. The 18-month deadline to sell a previous main residence and reclaim the ADS is firm, and late sales fall outside the relief entirely.
Forgetting the £40,000 return threshold. A return can still be required even when no tax is due, and failing to file on time can trigger a penalty from Revenue Scotland.
Overlooking joint-buyer ownership history. First-time buyer relief is lost entirely if any joint buyer has previously owned a home anywhere in the world, even if the other buyer has not.
Not accounting for ADS on inherited additional properties. Owning an inherited share in another property can still count towards ADS liability on a new purchase, depending on the size of the share.

Frequently Asked Questions

What is Land and Buildings Transaction Tax?

Land and Buildings Transaction Tax (LBTT) is the Scottish equivalent of Stamp Duty Land Tax. It applies to purchases of residential and commercial land and buildings in Scotland and is administered by Revenue Scotland rather than HMRC. It replaced SDLT in Scotland from April 2015.

What are the current LBTT residential bands?

For a standard residential purchase, LBTT is charged at 0% up to £145,000, 2% on the portion from £145,000 to £250,000, 5% from £250,000 to £325,000, 10% from £325,000 to £750,000, and 12% above £750,000. Each band applies only to the slice of the price within it, in the same slab style as SDLT.

Is there first-time buyer relief for LBTT?

Yes. First-time buyers benefit from a raised nil-rate threshold of £175,000 instead of £145,000, with the 2% band then running from £175,000 to £250,000 and the remaining bands unchanged. This can save a first-time buyer up to £600 compared with the standard rates.

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What is the Additional Dwelling Supplement?

The Additional Dwelling Supplement (ADS) is an extra 8% charged on the full purchase price of an additional residential property, such as a buy-to-let or second home, on top of the standard LBTT bands. It was raised from 6% to 8% in December 2024 and applies from the first pound, not just above the nil-rate threshold.

Can I reclaim the Additional Dwelling Supplement?

Yes, if the property being replaced was the buyer's only or main residence and is sold within 18 months of the new purchase, the ADS paid can be reclaimed from Revenue Scotland. The reclaim window and conditions are broadly similar to the equivalent SDLT surcharge refund in England.

How does LBTT differ from SDLT in England?

LBTT has its own band structure and thresholds set by the Scottish Government, separate from SDLT in England and Northern Ireland and from LTT in Wales. The nil-rate threshold for a standard purchase is higher under LBTT (£145,000) than under SDLT (£125,000), but LBTT applies a steeper marginal rate in the middle bands.

Who pays LBTT and when is it due?

The buyer is responsible for LBTT, and it must be paid, together with a return submitted to Revenue Scotland, within 30 days of the effective date of the transaction, which is usually the date of settlement (completion). Solicitors handling the conveyancing typically submit the return and payment as part of settlement.

Does LBTT apply to commercial property?

Yes. Non-residential and mixed-use transactions are charged under a separate set of commercial LBTT bands with different thresholds and rates from the residential bands, and different relief rules apply, for example for certain leases and grouped transactions.

Are there any other LBTT reliefs?

Beyond first-time buyer relief, reliefs exist for multiple dwellings (similar to Multiple Dwellings Relief under SDLT, though the rules differ), certain charities, and specific corporate reorganisations. Each relief has its own qualifying conditions and must usually be claimed on the LBTT return.

Do I need to file an LBTT return even if no tax is due?

A return is generally required whenever the purchase price exceeds £40,000, even if the transaction falls entirely within the 0% band, because the £40,000 threshold (rather than the tax-free band) determines whether a return must be filed. Below £40,000 no return is normally needed.

Calculators for this topic

Stamp Duty Calculator

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About the author

James Morgan

Property & Mortgage Writer

James Morgan has been writing about UK property and mortgages since 2016. He covers the full purchase journey — affordability checks, mortgage product comparison, the deposit and loan-to-value puzzle, stamp duty (SDLT in England and Northern Ireland, LBTT in Scotland, LTT in Wales), first-time buyer reliefs, conveyancing costs, and what to expect at completion. James also writes on the landlord side: buy-to-let mortgages, the 3% additional-property SDLT surcharge, Section 24 finance-cost restriction, rental yield maths, and the practical realities of being a small private landlord in the post-2017 tax regime. He has a particular interest in the remortgage decision — when to switch product, the trade-off between rate and arrangement fee, early repayment charges, and how to read a mortgage offer document. James's mortgage worked examples are built up from the underlying amortisation schedule, not borrowed from comparison sites, and stamp-duty figures are verified band-by-band against the HMRC SDLT calculator. He writes to CalcHub's editorial standards, with primary-source citations to HMRC, Revenue Scotland and the Welsh Revenue Authority, and clear disclosure that CalcHub does not sell mortgages or take affiliate commission on regulated mortgage products.

Property journalist since 2016
UK mortgage and stamp-duty specialism (SDLT, LBTT, LTT)
Writes to CalcHub editorial standards (primary-source citation, annual review)

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Disclaimer: This guide is for general information only and does not constitute tax or legal advice. LBTT rules can change and individual circumstances vary, so always confirm your position with Revenue Scotland or a qualified conveyancing solicitor before completing a purchase.