LBTT Explained: Scotland's Property Tax
Scotland sets its own property tax, and it differs from England in ways that matter, a higher nil-rate band, uncapped first-time buyer relief, and an 8% second-home charge on the whole price.
The Short Version
- LBTT is Scotland's property tax, collected by Revenue Scotland
- Nil-rate band is £145,000; rates then 2%, 5%, 10% and 12% by slice
- First-time buyer relief lifts the threshold to £175,000, with no upper cap
- The 8% Additional Dwelling Supplement is charged on the whole price of a second home
- ADS is reclaimable within 36 months if you sell your previous main residence
- The return is due within 30 days of settlement
What LBTT is
Land and Buildings Transaction Tax is Scotland's property purchase tax, collected by Revenue Scotland. It replaced UK Stamp Duty Land Tax in Scotland in April 2015, and while it works on a similar progressive-slice principle, the bands, rates and reliefs are set independently by the Scottish Government and differ from the English position.
Like SDLT, LBTT is charged on a slice basis: each rate applies only to the portion of the price that falls within that band, not to the whole price.
Residential rates
These rates apply for 2026, having been held unchanged in the Scottish Budget for 2026–27:
| Portion of purchase price | Rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,001 to £750,000 | 10% |
| Above £750,000 | 12% |
Worked example, a £300,000 purchase. Nothing on the first £145,000. 2% on the next £105,000 gives £2,100. 5% on the remaining £50,000 gives £2,500. Total: £4,600.
First-time buyer relief
Scottish first-time buyer relief raises the nil-rate threshold from £145,000 to £175,000. The maximum saving is £600.
The saving is smaller than England's in cash terms, but there is a crucial difference: there is no upper price cap. Unlike the English relief (which disappears entirely above £500,000) the Scottish relief is never lost. Every qualifying first-time buyer gets the benefit of the higher threshold regardless of the purchase price.
As elsewhere, the definition is strict: you must never have owned residential property anywhere in the world, and where there are joint buyers, every buyer must qualify.
The Additional Dwelling Supplement
This is where LBTT diverges most sharply from the English system, and where buyers are most often caught out. If you buy an additional residential property (a second home, a buy-to-let, a holiday home, or a new home before your existing one has sold) you pay the Additional Dwelling Supplement (ADS) on top of standard LBTT.
ADS is currently 8%, and critically it is charged on the whole purchase price, not band by band. On a £300,000 second home that is £24,000 in ADS alone, on top of the £4,600 standard LBTT: against roughly £15,000 for the equivalent English surcharge on the same price. ADS applies where the price is £40,000 or more.
If you are replacing your main residence but buy before selling, you pay ADS and can reclaim it from Revenue Scotland if you sell your previous main residence within 36 months.
Filing and payment
Your solicitor normally files the LBTT return and pays the tax from completion funds. The return is due within 30 days of the effective date, usually settlement, a more generous window than the 14-day SDLT deadline in England. A return must be filed even where no tax is due, for example on a first-time purchase below the threshold.
How LBTT compares with the rest of the UK
| Scotland (LBTT) | England & NI (SDLT) | Wales (LTT) | |
|---|---|---|---|
| Nil-rate band | £145,000 | £125,000 | £225,000 |
| First-time buyer relief | £175,000, no cap | £300,000, lost above £500,000 | None |
| Additional property | 8% on whole price | +5% per band | Separate higher bands |
| Return deadline | 30 days | 14 days | 30 days |
| Collected by | Revenue Scotland | HMRC | Welsh Revenue Authority |
Non-residential and mixed transactions
LBTT also applies to non-residential and mixed-use property, at a different set of rates, and to certain leases through a separate lease-transaction charge. If you are buying commercial premises, agricultural land or a mixed property, the residential figures above do not apply and you should take specific advice.
A Note on Jurisdiction
LBTT applies in Scotland only. England and Northern Ireland charge SDLT; Wales charges LTT. If you are buying outside Scotland, the rates on this page do not apply to you.
Common Questions
Frequently Asked Questions
What is the LBTT threshold in Scotland?
Standard buyers pay no LBTT on the first £145,000. Rates then rise through 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above that, charged on a slice basis. First-time buyers benefit from a higher nil-rate threshold of £175,000. These rates apply for 2026, having been held unchanged in the Scottish Budget for 2026-27.
How much LBTT will I pay on a £300,000 home?
For a standard buyer, £4,600: nothing on the first £145,000, 2% on the next £105,000 giving £2,100, and 5% on the remaining £50,000 giving £2,500. A qualifying first-time buyer would pay slightly less, £4,000, because of the higher £175,000 nil-rate threshold. A second home would add £24,000 in Additional Dwelling Supplement on top.
How is LBTT different from stamp duty?
LBTT is the Scottish equivalent of SDLT, but set independently. The main differences are the thresholds (Scotland's nil-rate band is £145,000 against England's £125,000), first-time buyer relief (Scotland's is smaller but has no upper cap, unlike England's), the second-home surcharge (Scotland's 8% Additional Dwelling Supplement is charged on the whole price rather than band by band), and the filing deadline (30 days against 14).
Can I reclaim the Additional Dwelling Supplement?
Yes, where you were replacing your main residence but bought the new home before selling the old one. If you sell your previous main residence within 36 months of the new purchase, you can reclaim the ADS from Revenue Scotland. This mirrors the equivalent reclaim mechanism for the SDLT surcharge in England, which also runs on a 36-month window.
Keep Reading
Related Guides and Pages
Stamp Duty (England)
The English equivalent, and how the two systems differ.
Scotland vs England
The full set of differences between the two systems.
First-Time Buyer Guide
How the relief works in practice across the UK.