Buying a Home in Scotland: LBTT, First-Time Buyer Relief and the 8% ADS Explained
Buying a Home in Scotland: LBTT, First-Time Buyer Relief and the 8% ADS Explained
Scotland has its own legal system for buying property and its own tax on the purchase. Stamp Duty Land Tax does not apply. Instead you pay Land and Buildings Transaction Tax (LBTT), collected by Revenue Scotland, and if you already own a home you may also pay the Additional Dwelling Supplement (ADS) at 8% of the whole price.
This guide covers how the Scottish buying process works, when the tax falls due, what you will pay at typical prices, and the ADS traps that catch joint buyers and people who buy before they sell.
Try it yourself: the LBTT Calculator works out LBTT and ADS on any price, with first-time buyer relief and a band-by-band breakdown.
How buying a home in Scotland works
If you have bought in England, the Scottish process will feel different in three ways.
1. Offers over and closing dates. Many Scottish homes are marketed at "offers over" a stated price. The figure is a floor, not a guide, and popular homes can sell well above it. You do not make your offer directly. Your solicitor formally "notes interest" with the seller's agent, and if several buyers do so, the seller sets a closing date by which sealed offers must be submitted. The seller does not have to accept the highest offer.
2. The Home Report. The seller must provide a Home Report for most residential sales. It has three parts: a single survey with a valuation, a property questionnaire and an energy report. Lenders generally base their valuation on it, so if you offer above the Home Report value, the extra usually has to come from your own funds rather than the mortgage. Read it before you note interest.
3. Missives. Once an offer is accepted, the solicitors exchange formal letters, called missives, to agree the terms. According to mygov.scot, you have a binding contract once the missives are accepted and both sides agree on the terms. Missives are often concluded later in the process than an English exchange of contracts, so the deal is not secure until then.
The transaction completes on the date of entry (settlement), when you pay the price and get the keys. For LBTT purposes this is normally the effective date.
When LBTT is due
The LBTT return must be made, and the tax paid, within 30 days of the effective date. In practice your solicitor submits the return and pays the tax on or around the date of entry, using funds you send them, because Registers of Scotland cannot register your title until the return is made and the tax paid. You remain legally responsible for the return even though your solicitor files it, so check the figures on the draft. Late returns and late payment carry penalties and interest.
Budget for LBTT from the start. It is not normally added to the mortgage, so it sits alongside your deposit, legal fees and removal costs.
LBTT rates for 2026/27
LBTT is charged in slices, like income tax. Each rate applies only to the part of the price within that band.
| Purchase price | LBTT rate |
|---|---|
| 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% |
Worked examples
| Price | Standard buyer | First-time buyer | Additional property (with 8% ADS) |
|---|---|---|---|
| £200,000 | £1,100 | £500 | £17,100 |
| £250,000 | £2,100 | £1,500 | £22,100 |
| £300,000 | £4,600 | £4,000 | £28,600 |
| £400,000 | £13,350 | £12,750 | £45,350 |
How the £300,000 standard figure is made up: nothing on the first £145,000, 2% on the next £105,000 (£2,100) and 5% on the final £50,000 (£2,500), giving £4,600.
The jump between £300,000 and £400,000 is the 10% band, which starts at £325,001. If you are negotiating around that level, every £1,000 above £325,000 adds £100 of tax.
First-time buyer relief
First-time buyer relief raises the nil-rate band from £145,000 to £175,000. The most it can save is £600 (2% of the £30,000 slice), at any price from £175,000 upwards. It is modest compared with England, but it is worth claiming, and it must be claimed on the LBTT return.
To qualify, according to Revenue Scotland's guidance:
- you must never have owned a residential property anywhere in the world, including an inherited share or a home abroad;
- you must intend to live in the new home as your only or main residence; and
- ADS must not apply to the purchase.
Joint buyers. Every buyer must meet all the conditions. If one of two buyers has owned a home before, the relief is lost for both. This is one of the most common errors on LBTT returns.
The Additional Dwelling Supplement (ADS)
ADS is charged at 8% of the whole purchase price, on top of the normal LBTT, for contracts entered into from 5 December 2024. It applies where, at the end of the day of purchase, a buyer owns two or more homes and is not replacing their only or main residence. It does not apply to purchases under £40,000, and since 1 April 2024 a share in a jointly owned home is only counted if that share is worth £40,000 or more.
Example: a buy-to-let at £250,000. LBTT is £2,100 and ADS is 8% of £250,000, £20,000. Total: £22,100, an effective rate of 8.8%.
Replacing your main residence
ADS does not apply if the new property replaces your only or main residence. That happens in one of two ways:
- Sell first. If you sold your previous main residence in the 36 months before buying the new one, and the new one becomes your main residence, no ADS is due.
- Buy first, then reclaim. If you complete on the new home before the old one sells, you pay ADS up front. If you then sell your previous main residence within 36 months of buying the new one, you can reclaim it. The window was 18 months for transactions up to 31 March 2024.
Example. You buy a £300,000 home while your current flat is still on the market. You pay £4,600 LBTT plus £24,000 ADS, £28,600 in all, at settlement. Your flat sells 9 months later, so you can claim back the £24,000.
Your solicitor can amend the original return to claim, or you can use Revenue Scotland's online repayment claim. If the claim is made more than 12 months after the original return, Revenue Scotland asks for proof of the sale. Factor the ADS cash into a bridging plan: you need the £24,000 for the months until the sale.
Joint purchases where one buyer already owns a home
ADS looks at every buyer. If you buy with a partner who owns a flat they are keeping (to let out, say), ADS applies to the whole price, not just their share, and neither of you gets first-time buyer relief.
Example. A couple buy their first home together for £250,000. One partner has never owned property. The other owns a flat worth £120,000, which they plan to rent out. Because one buyer will own two homes, the purchase attracts ADS: £22,100 instead of £1,500 with first-time buyer relief. If the partner sells the flat first, and it was their main residence, the replacement rules can remove ADS entirely.
Revenue Scotland also applies special rules to spouses, civil partners and cohabitants, so a partner's existing home can matter even if they are not on the title. Get this checked by your solicitor before you offer.
Using a Lifetime ISA in Scotland
The Lifetime ISA works the same way across the UK. For a first home you can use it if:
- the property costs £450,000 or less;
- you buy at least 12 months after your first payment into the account; and
- a conveyancer or solicitor acts for you, and the provider pays the money to them.
The £450,000 cap rarely bites in Scotland, but the timing can. Scottish closing dates move quickly, so tell your solicitor early that some of your deposit is coming from a Lifetime ISA, and request the withdrawal in good time before the date of entry. Our Lifetime ISA guide covers the bonus and the withdrawal charge in more detail.
How Scotland compares with England
| Price | Scotland (LBTT) | England (SDLT) | Wales (LTT) |
|---|---|---|---|
| £200,000, standard | £1,100 | £1,500 | £0 |
| £200,000, first-time buyer | £500 | £0 | £0 |
| £300,000, standard | £4,600 | £5,000 | £4,500 |
| £300,000, first-time buyer | £4,000 | £0 | £4,500 |
| £400,000, standard | £13,350 | £10,000 | £10,500 |
| £300,000, additional property | £28,600 | £20,000 | £19,950 |
Scotland is cheaper than England for standard buyers at lower prices, but more expensive for first-time buyers and from around £325,000 upwards. For additional properties, the 8% ADS compares with a 5% surcharge in England, and at £300,000 a second home costs £8,600 more in tax in Scotland than in England.
Frequently asked questions
Does my solicitor pay the LBTT for me? Your solicitor normally files the return and pays from funds you provide, around the date of entry. You are still legally responsible for it.
Can I add LBTT to my mortgage? Not usually. Plan to pay it from savings, alongside your deposit and fees.
I inherited a share of a house years ago. Am I a first-time buyer? Not for LBTT. Any previous ownership of residential property, anywhere in the world, rules out the relief.
Do I pay ADS if I am buying a home before my old one sells? Yes, normally. You can reclaim it if you sell your previous main residence within 36 months of buying the new one.
The bottom line
LBTT on a typical Scottish purchase is modest: £4,600 at £300,000, or £4,000 for first-time buyers. The real risk is ADS at 8% of the whole price, which can turn a £1,500 bill into £22,100 when one joint buyer keeps another home. Check every buyer's ownership history before you note interest, and if you buy before you sell, keep the ADS reclaim and the 36-month window firmly in your plan.
Check any price with the LBTT Calculator.
Related calculators and guides
- LBTT Calculator, LBTT and ADS for Scottish purchases
- Stamp Duty Calculator, SDLT in England and Northern Ireland
- LTT Calculator, Land Transaction Tax in Wales
- Mortgage Affordability Calculator, how much you could borrow
- Lifetime ISA Calculator, plan your first-home savings
- Stamp Duty Land Tax explained, the English system in detail
This article is for general guidance only and is not personalised tax or legal advice. Tax rules are complex and your circumstances may differ. For advice tailored to your situation, speak to a solicitor or qualified tax adviser. Figures are for the 2026/27 tax year and sourced from Revenue Scotland and gov.uk. The Scottish Budget can change LBTT rates, so check before you buy.
Sources
Rates and rules in this article are taken from the official pages below. Figures were checked against these sources at the last review date shown above; always confirm against the source before acting.
- Revenue Scotland: Land and Buildings Transaction Tax
- Revenue Scotland: LBTT residential property rates
- Revenue Scotland: Additional Dwelling Supplement
- Revenue Scotland: How to claim a repayment of ADS
- Revenue Scotland: LBTT4004, duty to make an LBTT return
- legislation.gov.uk: LBTT (Scotland) Act 2013, section 43 (registration)
- mygov.scot: Making an offer on a home
- GOV.UK: Withdrawing money from your Lifetime ISA
- GOV.UK: Stamp Duty Land Tax residential property rates
About the author
Alexandre Bernier, LLM (UK), CFP®, CIM®, PFP®. Financial planner with 18 years in banking and wealth management, holding a UK master of laws and the Canadian CFP®, CIM® and PFP® designations. Writes and reviews every calculator and article on FinanceToolz.
Rates and thresholds in this article are taken from HMRC and GOV.UK. See our editorial policy for how content is sourced, reviewed and corrected. This is general information, not regulated financial advice.