LBTT, or Land and Buildings Transaction Tax, is a tax applied in Scotland that replaced UK Stamp Duty Land Tax (SDLT) in 2015. It’s a tax on property or land purchases (or leases) over a certain price, with different bands applying different rates of tax.
LBTT works on a tiered system, similar to how income tax works. The buyer pays tax on different portions of the property price within each tax band. This is a major difference from the previous system, where you would have paid the same rate on the entire property price.
Here are the current (2023) residential property rates:
- £0 – £145,000: 0% tax
- £145,001 – £250,000: 2% tax
- £250,001 – £325,000: 5% tax
- £325,001 – £750,000: 10% tax
- Over £750,000: 12% tax
For example, if you bought a house for £280,000, you would pay nothing on the first £145,000, 2% on the next £105,000, and 5% on the remaining £30,000. Calculate your LBTT using the calculator link below.
There are different rates for commercial properties and leases, and there is also an additional dwelling supplement of 6% (of purchase price as of 16 December 2022) for anyone buying an additional residential property, for example, a second home or a buy-to-let property.
One should keep in mind that tax rates and bands can change over time, usually announced in budget statements, so it’s important to check the most up-to-date rates from a reliable source such as Revenue Scotland, which administers the tax.
As with all tax matters, the calculations can become complex depending on individual circumstances. It’s recommended to seek professional advice when dealing with taxes.
