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If you are buying a property in Scotland, one of the biggest costs to understand is Land and Buildings Transaction Tax, usually shortened to LBTT. It is the Scottish equivalent of Stamp Duty Land Tax in England, but the rules, rates and reliefs are different. Revenue Scotland says LBTT replaced SDLT in Scotland from 1 April 2015.
For buyers, LBTT can make a noticeable difference to the overall cost of moving, especially if you are purchasing a higher-value home or buying an additional property. Here is what you need to know.
1. What is LBTT?
LBTT is the tax paid on property and land transactions in Scotland above the relevant threshold. Revenue Scotland explains that the tax applies to residential and commercial land and building transactions in which a chargeable interest is acquired, and that different rates and bands apply depending on the type of property.
For most home movers, the key point is simple: if you are buying a residential property in Scotland, you should check whether LBTT is due and factor it into your budget before you make an offer.
2. Current residential LBTT rates in Scotland
Revenue Scotland’s current residential property guidance sets out these standard LBTT bands for residential purchases:
- 0% on the first £145,000
- 2% on the portion from £145,001 to £250,000
- 5% on the portion from £250,001 to £325,000
- 10% on the portion from £325,001 to £750,000
- 12% on the portion above £750,000
The Scottish Government says that in the 2026 to 2027 Budget, all LBTT rates and bands, including the Additional Dwelling Supplement, were kept at their current levels.
That means buyers in 2026 should still use the same structure unless the Scottish Government announces a future change.
3. LBTT is charged in slices, not on the full price
Like Stamp Duty, LBTT is a progressive tax. Revenue Scotland explains that each percentage rate applies only to the portion of the purchase price that falls within that band, not to the full purchase price.
So if you buy a property for £300,000, you do not pay 5% on the whole amount. Instead, you pay:
- 0% on the first £145,000
- 2% on the next £105,000
- 5% on the final £50,000
That makes the total LBTT £4,600. This is consistent with Revenue Scotland’s published rate structure.
4. First-time buyers may get relief
One of the main reliefs available is first-time buyer relief. Revenue Scotland says this increases the residential nil-rate band from £145,000 to £175,000, reducing tax by up to £600 for qualifying first-time buyers.
That means an eligible first-time buyer purchasing at £175,000 or above could save the maximum £600 compared with the standard residential rates.
5. Not everyone qualifies as a first-time buyer
This is where many buyers get caught out. Revenue Scotland says previous or current ownership of any residential property anywhere in the world means a buyer is not treated as a first-time buyer for this relief. It also says that where there is more than one buyer, each buyer must meet the qualifying conditions.
So if you have previously owned a home, inherited residential property, or are buying jointly with someone who has owned a home before, you may not qualify.
6. Additional properties can trigger ADS
If you are buying a second home, a buy-to-let or holiday property, or moving but have not yet sold your previous main residence, you may also need to pay the Additional Dwelling Supplement (ADS) on top of the normal LBTT. Revenue Scotland says ADS is charged when you buy an additional residential property in Scotland and already own one or more residential properties anywhere in the world, unless you are replacing your only or main residence under the rules.
The Scottish Government says ADS remains at its current level for 2026 to 2027, and current market guidance, based on the official rates, indicates that level is 8% of the total purchase price.
This can add a substantial extra cost, which is why buyers who are moving in stages should check their position carefully before exchanging contracts.
7. The timing of your sale can matter
Revenue Scotland’s ADS guidance says that for a new main residence bought on or after 1 April 2024, the extended 36-month time limits apply in relevant replacement-of-main-residence cases.
In practice, that means timing can be crucial if you are buying a new home before selling your old one. Buyers in that position should check whether ADS is due upfront and whether they may later qualify for relief or repayment under the rules. The exact outcome depends on the facts of the transaction.
8. LBTT should be part of your total moving budget
It is easy to focus only on deposit size and monthly mortgage payments, but LBTT can materially affect what you can afford. Buyers should budget for:
- deposit
- mortgage fees
- legal fees
- survey or valuation costs where relevant
- removals
- LBTT
- ADS, if applicable
This is especially important in Scotland, where the advertised price is not always the final agreed price, and competitive markets can push bids above the Home Report valuation or marketing figure. If you are planning a move, it is worth reading up on the Scottish process as well as the numbers - this Emoov guide to moving to Scotland is a useful starting point.
9. Use the official calculator before you commit
Revenue Scotland provides an official property transaction calculator and says it can be used to estimate LBTT liability based on the rates and bands in force at the effective date.
That makes it a sensible final check before you make an offer, especially if:
- you are a first-time buyer
- you already own another property
- you are buying jointly
- you are unsure whether ADS applies
10. The right advice can save expensive mistakes
LBTT is straightforward in principle, but the details can become more complicated where there are joint buyers, previous property ownership, inherited homes, mixed-use property or replacement-of-main-residence issues.
For that reason, it is worth speaking to your solicitor or tax adviser early if there is anything unusual about your purchase. A small misunderstanding on LBTT or ADS can have a big impact on your overall moving costs.
Thinking of buying in Scotland?
If you are planning a move north, make sure tax is part of your buying budget from the start. LBTT, legal fees and moving costs all affect what you can afford.
If you need to sell before you buy, start with a free online valuation and get a clearer picture of your budget before you begin your search.
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