How does LBTT and the Additional Dwelling Supplement work in Scotland?

Scotland's supplement is wider than people expect and its timing rules are the whole of the practical answer. Two periods of thirty-six months do the work: if you sold your previous main residence in the thirty-six months before buying, the supplement does not apply; and if you pay it because you had not yet sold, you can reclaim it if you sell within thirty-six months afterwards.

Step by step

1. Confirm the property is in Scotland.Land and Buildings Transaction Tax replaced stamp duty for Scottish land and buildings from April 2015. It applies to residential and commercial purchases and to commercial leases.
2. Understand the slice basis.Revenue Scotland states it plainly: the percentage for each band applies only to the part of the price over the relevant threshold and up to the next one. There is no cliff edge at a threshold.
3. Find the current rates.Revenue Scotland publishes residential rates and bands, the rates with the Additional Dwelling Supplement, non-residential rates and lease rates, alongside a calculator. Rates are set by the Scottish Government.
4. Work out whether the supplement applies.It applies where you buy a residential property in Scotland, already own one or more residential properties anywhere in the world, the price is above a low threshold set by Revenue Scotland, and you are not replacing your only or main residence.
5. Note that companies and trusts almost always pay it.Most purchases by non-natural persons — companies, corporate bodies and certain trusts — attract the supplement regardless of whether any other property is owned.
6. Use the thirty-six-month replacement window.The supplement does not apply if you disposed of your only or main residence in the thirty-six months before buying your new main residence. That window was extended from eighteen months in April 2024.
7. Use the thirty-six-month reclaim window.If you paid the supplement because you had not yet sold, you can reclaim it where you sell the previous main residence within thirty-six months, the new property became your main residence, and the previous one was your main residence within the thirty-six months before the purchase.
8. Check the joint buyer rules.For transactions from April 2024, only one joint buyer needs to meet the first two reclaim conditions, but both must meet the third. It is a narrow point that decides real cases, so ask your solicitor to apply it to your facts.
9. Check first-time buyer relief separately.Scotland's reliefs are its own. Check Revenue Scotland's residential guidance rather than assuming an English or Welsh relief applies.
10. Confirm the return and payment.Your solicitor submits the return and pays. Ask for confirmation and keep it with the settlement paperwork, and check the deadline on Revenue Scotland's submission guidance.

Tips

• Run Revenue Scotland's calculator with and without the supplement before you offer, so you know the worst case.
• If you buy before selling, put the thirty-six-month sale deadline and the reclaim deadline in the calendar on settlement day.
• Tell your solicitor about every residential interest anywhere in the world, including inherited shares.

Common mistakes

• Not diarising the reclaim deadline — Nobody prompts you, and once the thirty-six months have run the money is gone.
• Forgetting a property abroad — The test looks worldwide. An unmentioned overseas property produces an incorrect return, and the liability for that is yours.

If it doesn't work

Questions people ask