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Revision of Calculating Tax - rates and bands from 18 November 2014

The Cabinet Secretary for Finance, Employment, and Sustainable Growth announced the proposed rates and bands for LBTT on 9 October 2014 as part of the Draft Budget 2015-16. These rates are subject to parliamentary approval.

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 - proposed 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 proposed bands below:

Purchase price LBTT rate
Up to £135,000 0%
Above £135,000 to £250,000 2%
Above £250,000 to £1,000,000 10%
Over £1,000,000 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 £135,000, LBTT is charged at the appropriate rate on the amount of the chargeable consideration within the relevant bands. For example, a house bought for £300,000 is charged at:

  • 0% for the first £135,000, then
  • 2% for the next £115,000
  • 10% for the next £50,000 and
  • so £7,300 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.

Non-residential property transactions - proposed 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 proposed 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.

Rates and bands are expected to be confirmed by the Scottish Parliament in early 2015.

Leases of non-residential property - proposed LBTT rates and bands

Generally, leases of residential property are exempt from LBTT - LBTT(S)A 2013 schedule 2, paragraph 3. Guidance will explain the position of those exceptional types of residential leases which are chargeable to LBTT in the same fashion as non-residential leases.

For chargeable leases, the following proposed 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 provides for the calculation.

Rates and bands are expected to be confirmed by the Scottish Parliament in early 2015.

LBTT may also be payable on chargeable consideration other than rent, such as a premium. The standard proposed 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%

LBTT(S)A 2013 Schedule 19 paragraph 8.

Ref ID: 
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Last updated: 
19 November 2014