Land and Buildings Transaction Tax (LBTT)

If you are buying a property in Scotland, you might have heard of Land and Buildings Transaction Tax and wonder how it might affect you.


What is Land and Buildings Transaction Tax?

On 1 April 2015, Land and Buildings Transaction Tax (LBTT) replaced UK Stamp Duty Land Tax (SDLT) in Scotland, under new devolved powers contained in the Scotland Act 2012.


How is this tax different to UK Stamp Duty?

At introduction, the Scottish Government said that 9 out of 10 taxpayers will be no better or worse off under this system. It is a graduated tax rate which works in a similar way to income tax and is designed so that the charge is more proportionate to the price of the property.


When is LBTT payable?

Residential properties under £145,000 will not be subject to the tax. Rates applied above this purchase price can be seen in the table below. The tax is only payable on the amount above the threshold.

E.g. If the property cost £150,000, 2% tax would be applied to £5,000.

Revenue Scotland has developed online calculators for reference.

Purchase Price LBTT rate
Up to £145,000 0%
Above £145,000 to £250,000 2%
Above £250,000 to £325,000 5%
Above £325,000 to £750,000 10%
Over £750,000 12%


How will LBTT be paid?

LBTT is usually paid on behalf of the seller by their solicitor, as part of the conveyancing transaction. The final responsibility lies with the buyer so check with your solicitor if they will do this for you. If not, you will have to submit the form online. Practical advice for buyers submitting a return can be found at Revenue Scotland.


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