Land and Buildings Transaction Tax in Scotland

When purchasing a property, you will usually need to pay additional fees on top of the house price. While often referred to as ‘stamp duty’ in England and Northern Ireland, in Scotland it is known as Land and Buildings Transaction Tax, or LBTT.

LBTT is a lump-sum tax that anyone buying a property costing more than a set amount must pay. It is a similar system to the rest of the UK, but the thresholds it uses are different.

On 1 April, the Land and Buildings Transaction Tax rate in Scotland changed – but what does this mean for your house purchase?


What Changed in April 2021?

The Scottish Government introduced a temporary LBTT ‘holiday’ between July 2020 and March 2021. However, on 1 April the Land and Buildings Transaction Tax rate reverted to its original rate in Scotland.

This means that to have taken advantage of the holiday, you will have needed to complete your house purchase by March 31st. If you completed your purchase after 31 March, you will have missed the deadline and be required to pay the normal rate.


How much will I need to pay?

Land and Buildings Transaction Tax (LBTT) in Scotland is normally payable on a home costing £145,000 or more, and it increases as the house price increases.

You will usually be required to pay tax on part of that property within each band shown in the below table.

Need more information on how much you will need to pay? The Scottish Government has created a calculator to help you work it out.


How much LBTT do I need to pay as a first-time buyer in Scotland?

While the rate band for LBTT has risen to £145,000, you are in luck if you are a first-time buyer. First time buyers will pay no Land and Buildings Transaction Tax on the first £175,000 of a property.

For example, an AJC homes two bedroom detached bungalow in Chapelton costing £240,000 is above the threshold, so LBTT must be paid between £175,000 and £240,000. Therefore, at the rate of 2%, the LBTT due would be £1,300.

For a three bedroom Stephen home in Chapelton costing £309,000, LBTT must be paid between £175,000 and £309,000. Therefore, at the rate of 2% and the higher rate of 5%, LBTT due on this property would be £4450.

Further information on the first-time buyer relief is available on the Revenue Scotland website.


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