From 15 July 2020, the Scottish government cut the rate of the Land and Buildings Transaction Tax (LBTT), with the threshold increasing from £145,000 to £250,000 until 31 March 2021.
There will be no LBTT paid on homes up to £250,000, 5% on homes priced from £250,001 to £325,000, 10% on homes from £325,001 to £750,000 and 12% on homes over £750,000. This will mean that residential property transactions, where the purchase price is under £250,000, and to which the Additional Dwelling Supplement (ADS) does not apply, will attract no LBTT.
For transactions where the purchase price is above £250,000, the rates and thresholds that usually apply to the proportion of the purchase price above that amount remain unchanged.
Additional Dwelling Supplement
ADS is an additional amount of LBTT payable on the purchase of a second residence in Scotland. Where the ADS does apply, the change to the starting threshold will also apply to such transactions. This means that a residential property transaction that is liable to the ADS will not pay the standard rates of LBTT on the first £250,000 of the purchase price, however, the ADS will remain payable at 4% of the total purchase price.