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Glossary

Land and Buildings Transaction Tax

Scotland's tax on buying property, collected by Revenue Scotland in place of Stamp Duty Land Tax, with its own bands and first-time buyer relief.

Reviewed by CentExact2 sources

Land and Buildings Transaction Tax, LBTT, is the tax on buying a home in Scotland. It takes the place of Stamp Duty Land Tax there and is collected by Revenue Scotland, not HMRC. Like the English tax it is marginal: each rate applies only to the part of the price inside its band.

The residential bands published by Revenue Scotland, in force since 1 April 2021, are nothing up to £145,000, 2% on the part to £250,000, 5% to £325,000, 10% to £750,000 and 12% above. On a £300,000 home that is nothing on the first £145,000, £2,100 on the next £105,000 and £2,500 on the last £50,000: £4,600 in all. The same house in England would pay £5,000, so the Scottish tax is lighter at that price, but its 10% band starts at £325,000 rather than £925,000, so on a £500,000 home it is the heavier of the two by a wide margin.

First-time buyers get a relief that lifts the nil band from £145,000 to £175,000, worth up to £600. Buying a further home while keeping one you already own brings the Additional Dwelling Supplement, charged on top of LBTT, so check Revenue Scotland's page on it before you budget for a second property.

The British setting in the mortgage calculator charges the English and Northern Irish scale and does not model LBTT, so for a Scottish purchase replace its transfer-tax figure with the one from Revenue Scotland's own calculator before you rely on the cash-to-complete total.

Where to work it out

Sources

  1. Revenue Scotland, LBTT residential property
  2. GOV.UK, Stamp Duty Land Tax: residential property rates