Buying a home in Scotland comes with unique tax considerations. While most of the UK pays Stamp Duty Land Tax (SDLT), here in Scotland the equivalent charge is called the Land and Buildings Transaction Tax (LBTT). Whether you’re a first-time buyer, upsizing, or purchasing an additional property, understanding LBTT is essential for budgeting your next move.
And as recent headlines about Angela Rayner show, even the most high-profile figures can get caught out by property tax rules—making it all the more important to get it right.
What Is LBTT?
LBTT is a progressive property tax applied to most residential and non-residential property purchases in Scotland. It’s administered by Revenue Scotland and usually calculated and submitted by your solicitor, but the legal responsibility always lies with the buyer.
Current LBTT Rates for Residential Property (2025)
Standard residential rates:
• 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%
Example: Buying at £300,000 = £4,600 LBTT payable.
First-Time Buyer Relief
First-time buyers get an increased tax-free threshold:
• 0% up to £175,000
• Standard rates apply above this.
That means you could save up to £600 compared to a non-first-time buyer.
The Additional Dwelling Supplement (ADS)
Purchasing a second home, buy-to-let, or holiday property? An Additional Dwelling Supplement (ADS) of 8% on the total purchase price applies—on top of the standard LBTT rates.
Example: a £200,000 second home would mean:
• 2% LBTT (£1,100)
• Plus 8% ADS (£16,000)
Total: £17,100
Why It Matters: The Angela Rayner Case
In September 2025, UK Deputy Prime Minister Angela Rayner admitted she had underpaid stamp duty on an £800,000 flat in Hove, due to misapplied tax rules. Experts estimate she may face an additional £40,000 bill, plus possible penalties and interest.
While her case falls under England’s SDLT system, the lesson applies everywhere: getting property tax wrong can be costly and damaging. For buyers in Scotland, ensuring your LBTT and ADS are calculated correctly is just as critical.
Key Takeaways for Scottish Homebuyers
1. Know your thresholds – Different rules apply for first-time buyers, movers, and investors.
2. Factor in ADS early – If you’re buying a second property, the 8% supplement can significantly impact affordability.
3. Seek professional advice – A qualified solicitor or mortgage advisor ensures you don’t make costly mistakes.
4. Budget realistically – Always include LBTT in your upfront costs when planning a purchase.
SEO-Friendly FAQs
Q: Do first-time buyers in Scotland pay stamp duty?
A: No—first-time buyers benefit from a £175,000 tax-free allowance before LBTT kicks in.
Q: How do I calculate LBTT?
A: Use an online LBTT calculator or speak to your solicitor for an exact figure.
Q: What is ADS in Scotland?
A: It’s the Additional Dwelling Supplement, an 8% surcharge on additional property purchases.
Q: Can I reclaim ADS?
A: Yes—if you sell your main residence within 18 months, you may be able to reclaim ADS.
Final Thoughts
LBTT may not grab headlines every day, but as Angela Rayner’s experience shows, property tax mistakes can have major consequences. For Scottish homebuyers, understanding LBTT and ADS—and seeking the right professional guidance—ensures your purchase goes smoothly and without surprises.
Looking for tailored advice or mortgage support? Get in touch today—we’ll guide you through every step, including LBTT calculations, so you can move forward with confidence.