Following the proposals in the Scottish budget delivered by Scottish Finance Secretary Derek Mackay in December last year, the Scottish Parliament has approved a number of changes to the devolved land and buildings transaction tax (LBTT) property tax regime which came into effect 25 January 2019.

Increase in the Additional Dwelling Supplement (ADS) 

Originally introduced 1 April 2016 as a surcharge on the acquisition of certain residential second homes and buy-to-let properties in Scotland, ADS increased from 3% to 4% on 25 January 2019. Where the contract for a transaction was concluded prior to 12 December 2018 but the transaction is due to settle on or after 25 January 2019, the previous rate of 3% will still apply. 

As before, a transaction will not be caught by ADS if the purchaser is replacing their “only or main residence”, or if the price of the additional property is less than £40,000.

The equivalent surcharge south of the border - the SDLT Higher Rate for Additional Dwellings - remains at 3%, which means that purchases of second homes, holiday homes and buy-to-let properties in Scotland will attract a higher rate of additional property tax than the rest of the UK. 

Changes to non-residential rates of LBTT 

Whilst the rates of the principal LBTT charge for residential properties remain the same, the following changes will be made to the non-residential rates of LBTT:

  • the lower rate will be reduced from 3% to 1%;
  • the upper rate will be increased from 4.5% to 5%;
  • the starting threshold for the upper rate to apply will be reduced from £350,000 to £250,000.

As a result, the updated table of non-residential rates looks like this:



Purchase   Price 


Rate   of LBTT

Up to £150,000


£150,001 - £250,000


Over £250,000


For advice relating to the changes to ADS, non-residential rates or any other aspect of LBTT, please get in touch with your Turcan Connell contact who will be very happy to assist.