Calculating Tax - rates and bands

The rates and bands for the new taxes have now been approved by the Scottish Parliament for 2016/17.

Online Tax Calculators

Revenue Scotland has developed online calculators which work out the amount of LBTT payable on residential and non-residential land and property transactions. These calculators are for reference purposes only.

Residential property transactions - LBTT rates and bands

For residential property transactions, the rate of tax is determined by reference to percentages of the chargeable consideration for the transaction falling within the bands below:

Purchase price LBTT rate
Up to £145,000 0%
Above £145,000 to £250,000 2%
Above £250,000 to £325,000 5%
Above £325,000 to £750,000 10%
Over £750,000 12%

LBTT(S)A 2013 section 24 provides for the calculation and section 59(1) sets out what counts as residential property. Where a residential transaction involves any element of non-residential property LBTT(S)A 2013 section 24(4) provides that the transaction will be treated as a non-residential property transaction.

If the purchase price is above the nil rate tax band of £145,000, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within the relevant bands. For example, a house bought for £280,000 is charged at:

  • 0% for the first £145,000, then
  • 2% for the next £105,000
  • 5% for the next £30,000 and
  • so £3,600 must be paid in LBTT

Consideration genuinely attributable to moveable property is not included within chargeable consideration. Moveable property includes fixtures and fittings eg. curtains and furniture.

Additional Dwelling Supplement - LBTT rates and bands

The Land and Buildings Transaction Tax (Amendment) (Scotland) Act 2016 provides for an Additional Dwelling Supplement (ADS) of LBTT to be applied on purchases of additional residential properties in Scotland (such as buy-to-let properties and second homes) of £40,000 or more. The current rate of ADS is 3% of the ‘relevant consideration’ (usually the purchase price). Paragraph 4 of schedule 2A sets out how the Additional Dwelling Supplement is calculated and the parameters for defining the relevant consideration. The supplement may apply to parts of some non-residential transactions, which the taxpayer (or in most cases their agent) will determine by the concept of “just and reasonable apportionment”. Further details on the Additional Dwelling Supplement can be found in the Guidance section of the website.

Non-residential property transactions - LBTT rates and bands

For non-residential property transactions, the rate of tax is determined in the same manner as for residential property transactions but by reference to different rates and bands:

Purchase price LBTT rate
Up to £150,000 0%
Above £150,000 to £350,000 3%
Above £350,000 4.5%

LBTT(S)A 2013 section 24 provides for the calculation and section 59(2) sets out what counts as non-residential property. Where a non-residential transaction involves any element of residential property LBTT(S)A 2013 section 24(4) provides that the transaction will still be as a non-residential property transaction.

If the value is above the payment threshold, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within that band. For example, an office bought for £465,000 is charged at:

  • 0% for the first £150,000
  • 3% for the next £200,000 and
  • then 4.5% for the remaining £115,000
  • so £11,175 must be paid in LBTT

LBTT(S)A 2013 schedule 2 sets out how chargeable consideration is to be determined and amongst other things non-monetary consideration is chargeable consideration.

These rates and bands should also be used to determine the tax due on any premium paid for the assignation of a lease (other than those treated as the grant of a new lease).

Rates and bands have now been confirmed by the Scottish Parliament.

Leases of residential property

Generally, leases of residential property are exempt from LBTT - LBTT(S)A 2013 schedule 1, paragraph 3. Our legislation guidance explains the position of those exceptional types of residential leases which are chargeable to LBTT in the same fashion as non-residential leases.

Leases of non-residential property - LBTT rates and bands

For chargeable leases, the following tax rates and bands apply to the Net Present Value of the rent payable under the lease:

NPV of rent payable Rate of tax to apply
Up to £150,000 0%
Above £150,000 1%

LBTT(S)A 2013 schedule 19, paragraph 3-7 provides for the calculation.

LBTT may also be payable on chargeable consideration other than rent, such as a premium. The standard tax rates and bands for non-residential property transactions apply to any such payments under a lease:

Premium Rate of tax to apply
Up to £150,000 0%*
Above £150,000 to £ 350,000 3%
Above £350,000 4.5%

* Please note that where the ‘relevant rent’ (in other words the average rent) is at least £1,000 per annum, the nil rate tax band does not apply in relation to the premium; all such consideration should be taxed at the tax rate of the next tax band.

LBTT(S)A 2013 Schedule 19 paragraph 8.

Ref ID: 
guide-ref-1
Archive Date: 
24 August 2016
Last updated: 
24 August 2016

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Updated date: 2014-11-18 16:09
Version ID: 280
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