Land and Buildings Transaction Tax

The Scottish Government is planning to introduce the Land and Buildings Transaction Tax, which is a new way to tax the purchase of homes in Scotland from April 2015.

The system of stamp duty land tax (SDLT) was often referred to as a ‘slab’ tax. Once a price threshold is passed, the whole purchase price is taxed at the relevant rate.

The new Scottish Land and Buildings Transaction Tax (LBTT) will replace stamp duty in Scotland, and will mean that different charges will be payable by homebuyers depending on the price of the property they purchase.

How much will I pay?

Previously, stamp duty was payable on the purchase of all homes costing more than £125,000. The revised proposal means that from April 2015 there will be no charge payable on homes costing £145,000 or less.

The amount of Stamp Duty you will pay after the first £145,000 increases on a sliding scale. That means you’ll pay LBTT on the part of the property price within each tax band, as follows:

  • nothing on the first £145,000 of the property price
  • 2% on the next £105,000
  • 5% on the next £75,000
  • 10% on the next £425,000
  • 12% on the rest (above £750,000)
Property Value
LBBT Rate
 Up to £145,000
 0%
 £145,001 to £250,000
 2%
 £250,001 to £325,000
 5%
 £325,000 to £750,000
 10%
 £750,001 and over
12%

For example, if you buy a property for £275,000, you’ll pay £3,350 in LBTT, as follows:

  • £0 on the first £145,000
  • £2,100 on the next £105,000
  • £1,250 on the remaining £25,000
  • Total = £3,350

Further examples of Land and Buildings Transaction Tax are shown below.

Example property value
 Amount payable under new LBTT system
 £125,000  £0
 £150,000  £100
 £175,000  £600
 £200,000  £1,100
 £225,000
 £1,600
 £250,000
 £2,100
 £275,000
 £3,350
 £300,000
 £4,600
 £325,000  £5,850
 £350,000  £8,350
 £450,000  £18,350
 £550,000  £28,350
 £700,000  £43,350

You can work out how much tax is payable under LBTT by using this calculator which has been produced by the Scottish Government:

https://www.revenue.scot/land-buildings-transaction-tax/tax-calculators