Land and Buildings Transaction Tax (LBTT) is a tax on property transactions in Scotland. It was introduced on April 1, 2015, replacing the Stamp Duty Land Tax (SDLT) in Scotland. LBTT is administered by Revenue Scotland and applies to residential and non-residential property purchases and leases.

Key Points of Land and Buildings Transaction Tax (LBTT):

1. Scope: LBTT applies to both residential and non-residential property transactions, including the purchase and lease of land and buildings.
2. Who Pays: The tax is payable by the purchaser or the tenant in the case of a lease.
3. When to Pay: The tax must be paid within 30 days of the effective date of the transaction, which is typically the date of completion.

Current Rates (as of 2024):

Residential Property Rates

• Up to £145,000: 0%
• £145,001 to £250,000: 2%
• £250,001 to £325,000: 5%
• £325,001 to £750,000: 10%
• Over £750,000: 12%

Additional Dwelling Supplement (ADS) Rates

• An additional 4% on top of the standard rates for purchases of additional residential properties (e.g., buy-to-let properties and second homes).

Non-Residential Property Rates

• Up to £150,000: 0%
• £150,001 to £250,000: 1%
• £250,001 to £1,000,000: 5%
• Over £1,000,000: 6%

Non-Residential Lease Rates

• Up to £150,000: 0%
• £150,001 to £2,000,000: 1%
• Over £2,000,000: 2%

These rates are applied progressively, meaning that only the portion of the price within each band is taxed at the corresponding rate. This progressive system ensures that higher-value properties incur a higher overall tax rate.

Example Calculation for Residential Property:

For example, if you purchase a residential property for £400,000:

• The first £145,000 is taxed at 0%.
• The next £105,000 (from £145,001 to £250,000) is taxed at 2%.
• The next £75,000 (from £250,001 to £325,000) is taxed at 5%.
• The remaining £75,000 (from £325,001 to £400,000) is taxed at 10%.

Calculating the total LBTT for this example:

• 0% on £145,000 = £0
• 2% on £105,000 = £2,100
• 5% on £75,000 = £3,750
• 10% on £75,000 = £7,500

Total LBTT = £2,100 + £3,750 + £7,500 = £13,350

For additional residential properties, the ADS would add 4% of the total purchase price to the LBTT, making it significantly higher.

Resources and Further Information:

For detailed guidance and assistance with LBTT calculations, it’s advisable to consult Revenue Scotland’s website or seek advice from a tax professional. Revenue Scotland provides comprehensive resources, including calculators and guidelines, to help taxpayers understand their liabilities and compliance requirements.