What is Land and Buildings Transaction Tax?
The LBTT is a cost on land transactions in Scotland in terms of the Land and Buildings Transaction Tax (Scotland) Act 2013. The name might be different, but Scotland still have a similar Stamp Duty system to the rest of the UK. LBTT tax will need to be paid when you purchase a residential or commercial property that is over a certain band.
The differences between Scotland and the UK include:
LBTT Rates-unlike the rest of the UK, Scotland use different price purchase bands so you will pay nothing if your property is valued below £145,000.
Paying LBTT- The LBTT is managed by Revenue Scotland with the help of Registers of Scotland (RoS) so any payments would go through them and not the HMRC.
Land and Buildings Transaction Tax bands
If you purchase a property in Scotland, these rates are paid only on the part of the property price within each tax band:
0% on the first £145,000 paid
2% on the property price between £145,001 and £250,000
5% on the property price between £250,001 and £325,000
10% on the property price between £325,001 and £750,000
12% on property price above £750,001
For example, if you were buying a house in Scotland that was valued at £400,000 you would have to pay £13,350 in LBTT:
Nothing on the first £145,000
2% on £145,001 to £250,000
5% on £250,001 to £325,000
10% above £325,000
Buy-To-Let for Land and Buildings Transaction Tax
The Scottish Finance Secretary John Swinney announced that from April 2016 there will be an extra surcharge of 3% on top of your current LBTT if you are planning to purchase an additional property for example, a second home or buy-to-let.
Properties that have a value of £40,000 or less will not have to pay the additional LBTT.
|LBTT percentage rate from April 2016
|Purchase Price Bands (£)
||Current LBTT percentage rate (%)
||New LBTT percentage rate (%)
|Up to £145,000
|£145,001 to £250,000
|£250,001 to £325,000
|£325,001 to £750,000
Paying your LBTT
LBTT can be paid either by online or paper return, in most cases your solicitor should process this payment for you.
Last reviewed February 2016.