Accessibility links

  • Skip to content
  • Accessibility Help

You are using an outdated browser. Upgrade your browser today for a better experience of this site and many others.

Click button to open menu
  • Home
  • About Us
    • About The Firm
    • Company History
    • Why Choose Us?
    • Meet the Team
    • Join the Team
    • Mission Statement
    • Corporate Social Responsibility
    • The Finnies App
  • Services
    • Services for Business
      • Overview
      • Accountancy
      • Auditing
      • Bookkeeping
      • Business Growth
      • Company Secretarial
      • Corporate Finance Services
      • Exit Planning
      • Human Resources Support
      • Payroll
      • Rescue & Recovery
      • Succession Planning
    • Services for Individuals
      • Overview
      • Retirement Planning
      • Self Assessment
      • Wealth Management
    • Tax
      • Overview
      • Personal Tax Planning
      • Corporate Tax
      • Estate and Inheritance Tax
      • Capital Gains Tax
      • HMRC Investigations
      • VAT Advice
      • International Tax
    • Cloud Accounting
      • Overview
      • QuickBooks Online
      • Xero
      • Making Tax Digital – What does it mean to me?
  • Specialisms
    • Manufacturing
    • Academies
      • Overview
      • Audit
      • Payroll Services
      • Responsible Officer Duties
    • Musicians
      • Overview
      • For You Personally
      • Incorporation of Your Business
      • Overseas Engagement
      • VAT Registration
  • Resources
    • Your business
      • Overview
      • Developing your business
      • Essentials
      • Limited companies
      • PAYE, NICs and benefits
      • Starting a business
      • VAT
    • Your money
      • Overview
      • Personal taxation
      • Savings & investments
    • Tax information
      • Overview
      • Statement
      • Budget
      • Tax calendar
      • Tax rates and allowances
    • Guides
    • Tax strategies
      • Overview
      • Tax and financial strategies 2022/23
      • Strategies for your business
      • Exiting your business
      • Tax and employment
      • Planning for yourself and your family
      • Making the most of savings and investments
      • A comfortable retirement
      • Tax-efficient estate planning
    • Interactive tools
      • Overview
      • Calculators
      • Companies House forms
      • HMRC forms
      • Links
    • IRIS OpenSpace
  • Blog
    • Blog
    • Business News
    • Hot Topics
  • Contact Us
  • Privacy Policy - Test and Trace
finnies
Facebook Twitter LinkedIn Google+ YouTube
01482 861919 enquiries@finnies.org.uk

Land and Building Transaction Tax

  1. Resources
  2. Your money
  3. Personal taxation

Land and Building Transaction Tax (LBTT) is payable by the purchaser in a land transaction which occurs in Scotland. At Finnies, we can provide LBTT advice.

Who pays the tax?

LBTT is payable by the purchaser in a land transaction occurring in Scotland. Stamp Duty Land Tax (SDLT) applies to land transactions in England and Northern Ireland and Land Transaction Tax (LTT) applies in Wales. Please see the separate factsheets for information on SDLT and LTT.

What is a land transaction?

A transaction will trigger liability if it involves the acquisition of an interest in land. This will include a simple conveyance of land such as buying a house, creating a lease or assigning a lease.

When is the tax payable?

The tax has to be paid when a contract has been substantially performed. In cases where the purchaser takes possession of the property on completion, that will be the date. However, if the purchaser effectively takes possession before completion - known as ‘resting on contract’ - that will be regarded as triggering the tax.

Residential rates of LBTT

The Scottish government temporarily raised the threshold at which LBTT is paid from £145,000 to £250,000 between 15 July until 31 March 2021. The rates which apply from 1 April 2021 are set out in the following table:

Residential property Band % Rate
£0 - £145,000 0
£145,001 - £250,000 2
£250,001 - £325,000 5
£325,001 - £750,000 10
£750,001 and over 12

The rates apply to the portion of the total value which falls within each band.

First-time buyer relief

A LBTT relief applies for first-time buyers of properties up to £175,000. The relief raises the zero tax threshold for first-time buyers from £145,000 to £175,000, and, according to the Scottish government, 80% of first-time buyers in Scotland will pay no LBTT at all. First-time buyers purchasing a property above £175,000 also benefit from the relief on the portion of the price below the threshold. So all first-time buyers will benefit from a relief of up to £600.

Higher rates for additional residential properties

Higher rates of LBTT are charged on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes.

The main target of the higher rates is purchases of buy to let properties or second homes. However, there will be some purchasers who will have to pay the additional charge even though the property purchased will not be a buy to let or a second home. The 18 month rules set out below will help to remove some transactions from the additional rates (or allow a refund). Care will be needed if an individual already owns, or partly owns, a property and transacts to purchase another property without having disposed of the first property.

The higher rates are 4% above those shown in the table above. The higher rates potentially apply if, at the end of the day of the purchase transaction, the individual owns two or more residential properties.

Some further detail:

  • purchasers will have 18 months to claim a refund of the higher rates if they buy a new main residence before disposing of their previous main residence
  • purchasers will also have 18 months between selling a main residence and replacing it with another main residence without having to pay the higher rates
  • a small share in a property which has been inherited within the 18 months prior to a transaction will not be considered as an additional property when applying the higher rates
  • there will be no exemption from the higher rates for significant investors
  • LBTT includes an 18 month period rather than 36 months which applies for Stamp Duty Land Tax (SDLT).

Non-residential rates of LBTT

Non-residential Band % Rate
£0 - £150,000 0
£150,001 - £250,000 1
£250,001 - over 5

Different bands and rates apply prior to 25 January 2019.

The Scottish government has LBTT calculators which work out the amount of LBTT payable. The calculators can be found at www.revenue.scot/land-buildings-transaction-tax/tax-calculators.

How we can help

Please do contact us at Finnies for guidance on LBTT.

Are you still on track for retirement? Capital gains tax and the family home Child Benefit charge Dividend nil-rate Does your estate planning pass the test? Furnished holiday lettings Giving to charity Inheritance tax - a summary Land and Building Transaction Tax Land Transaction Tax Lasting Powers of Attorney Making a will and other related matters Personal tax - self assessment Personal tax - when is income tax and capital gains tax payable? Planning for a year's prosperity Repayment of student loans Separation and divorce Stamp Duty Land Tax Statutory Residence Test Supporting your children

Connect with us

Facebook LinkedIn Twitter Google+ YouTube
Copyright

© 2022 Finnies Chartered Certified Accountants. All rights reserved.

We use cookies on this website, you can find more information about cookies here.
Address
Finnies Chartered Certified Accountants, 4-6 Swaby's Yard, Walkergate, Beverley HU17 9BZ

Please call:
01482 861919

Or email us:
enquiries@finnies.org.uk

Quicklinks

Home | Contact Us | Site map | Accessibility | Legals and Disclaimer | Privacy Policy - Test and Trace | Help |

XERO logo quickbooks.png
Reviews and Ratings for accountant Neil Tomlin, Hull