The homebuying process

Land and Buildings
transaction tax

What is Land and Buildings Transaction Tax?

Land and Buildings Transaction Tax (LBTT) is paid if you're buying a house for over £145,000 in Scotland. If you're in England, Wales and Northern Ireland, Stamp Duty Land Tax (SDLT) is paid if you're buying a house for over £125,000.

If you're buying a rental property or second home, you may have to pay an extra 3% in Stamp Duty or LBTT. Different rates apply for commercial property.

How much will I have to pay?

The amount you have to pay will be usually based on the purchase price, and you won't pay any tax on the first £145,000 of the sale. So long as you're not purchasing a second property (eg a second home or buy to let property), there will be no LBTT at all on anything valued below that £145,000 figure.

Tax rates range from 2%-12%, you can find out the exact amount you may have to pay on the property you're buying using the calculator from Revenue Scotland.

Costs for first time buyers and second home owners

First time buyers

  • If you're buying your first home in Scotland, you'll get a discount on your LBTT
  • If you're buying a property for between £145,001 and £175,000, you'll get a discount of up to £600 on the tax
  • If you're buying a property for over £175,000, you'll get a discount of £600 on the tax.  

Buying a second home

  • If you are buying an additional residential property in Scotland, including rental properties, second homes and holiday homes, you have to pay an extra 3% LBTT
  • You'll pay this additional amount unless the main or second property costs less than £40,000.

How do I pay for this tax?

With any big purchase, it's important to work out your budget. It's best not to borrow more money on your mortgage to cover LBTT, as this could affect your loan to value ratio. 

It's a good idea to make sure you have the cash to pay for LBTT before you make an offer on a property. You can use our budget calculator to see how to cover this cost.

Your solicitor will usually calculate and collect the LBTT in advance, but it's legally the buyers' responsibility to make sure it's paid on time.

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