When the coronavirus crisis hit in 2020, England and Northern Ireland announced a ‘Stamp Duty Holiday’. The Scottish Government soon followed, confirming that they would temporarily raise the nil Land and Building Transaction Tax (LBTT) threshold from £145,000 to £250,000 from 15th July 2020.
The LBBT holiday came to an end on 31st March with the zero tax threshold increasing back to £145,000. First time buyers will continue to benefit from a nil tax threshold of £175,000 as they did prior to the holiday.
Despite Rishi Sunak announcing that the end date for the stamp duty holiday in England and Northern Ireland would be extended from the end of March to 30th June 2021 in his Budget, the LBBT holiday ended on 31st March 2021 as planned.
What is LBTT?
Land and Buildings Transaction Tax (LBTTT) is Scotland’s version of stamp duty. It’s a tax applied to residential and commercial property purchases (including commercial leases) in Scotland.
How Much is LBTT in Scotland?
How much LBTT is paid on a residential property transaction depends on the price the property is sold for. There are a number of LBTT bands with different tax percentages applied to each.
In July 2020, the nil tax threshold was raised from £145,000 to £250,000 for residential property transactions, however, the percentages for the other bands remained the same. The following table shows the amount of LBTT payable on residential property transactions for each band.
When the nil tax threshold reverted back to £145,000, first time buyers remained entitled to relief of up to £175,000 as they were prior to 15th July 2020.
Why not check out our easy to use online LBTT calculator to work out how much you’ll need to pay?
| LBBT Band | Transactions before 15th July 2020 and after 31st March 2021 | Transactions between 15th July 2020 and 31st March 2021 |
| Up to £145,000 | 0% | 0% |
| £145,001 – £250,000 | 2% | 0% |
| £250,001 – £325,000 | 5% | 5% |
| £325,001 – £750,000 | 10% | 10% |
| Over £750,000 | 12% | 12% |
How Much More LBTT Will I Need to Pay if I’m Purchasing After 31st March 2020?
Anyone who purchased a property over £250,000 during the LBTT holiday would have only paid the tax on the amount over £250,000. During this time, it was possible to save up to £2,100 on LBTT.
Since the holiday came to an end on 31st March, buyers will have to pay up to £2,100 more on LBTT than they would have had they purchased during the holiday period. First time buyers, however, will still benefit from the £175,000 tax relief, meaning they will only have to pay up to £1,500 more than they would have done during the holiday.
What is the Additional Dwelling Supplement?
The LBBT Holiday meant anyone buying a property under £250,000 wasn’t required to pay LBTT unless they were purchasing a second home, in which case they would have to pay the Additional Dwelling Supplement.
The Additional Dwelling Supplement (ADS) is a surcharge of 4% which applies to purchases of second homes. ADS was still charged throughout the LBBT holiday and continues to apply following the end of the holiday.
If you intend to sell your first property, you will be able to claim ADS back so long as you sell within 18 months of purchasing your second property.
For more information and advice on Land and Building Transaction Tax, get in touch with a member of our friendly team today or read our blog for more news and guidance.