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.

MENU
  • Home
  • About us
  • Services
    • Overview
    • Business start-up
    • Compliance services
    • Investments & Pensions
    • Support services
    • Taxation
  • Factsheets
    • Overview
    • Capital taxes
    • Corporate and business tax
    • Employment and related matters
    • Employment issues (tax)
    • General business
    • ICT
    • Pensions
    • Personal tax
    • Specialist areas
    • Starting up in business
    • VAT
  • Resources
    • Overview
    • accSEND
    • Downloadable forms
    • Market data
    • Online calculators
    • Tax calendar
    • Tax rates & allowances
    • Useful links
  • News
    • Overview
    • Statement
    • Budget
    • Hot Topic
    • Latest News for Business
  • Contact us
J R Watson & Co Accountants

Northampton: 01604 630745 Rugby: 01788 575037 Email us

Land and Building Transaction Tax

Land and Buildings Transaction Tax (LBTT) is payable by the purchaser in a land transaction which occurs in Scotland. This factsheet summarises the rates of LBTT which apply.

  1. Factsheets
  2. Capital taxes

Land and Building Transaction Tax (LBTT) is payable by the purchaser in a land transaction which occurs in Scotland. At J R Watson & Co Accountants, we can provide guidance on LBTT in the Northampton and Rugby area.

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

If you are in the Northampton and Rugby area please do contact us for guidance on LBTT.

Capital gains tax Capital gains tax and the family home Inheritance tax - a summary Inheritance tax avoidance - pre-owned assets Land and Building Transaction Tax Land Transaction Tax Stamp Duty Land Tax Trusts

The latest news

09 May 2022

HMRC starts chasing up SEISS overpayments

HMRC has started to recover overpayments of Self-employment Income Support Scheme (SEISS) grants.

09 May 2022

UK government unveils energy strategy

Up to eight more nuclear reactors could be delivered to existing sites as part of the UK's new energy strategy.

09 May 2022

Treasury announces it will regulate some forms of cryptocurrency

The Treasury has announced that it plans to recognise stablecoins as a valid form of payment as part of a wider government initiative to 'make Britain a global hub for cryptoasset technology and investment'.

Home | Site map | Accessibility | Disclaimer | Privacy | Help |

© 2022 J R Watson & Co Accountants. All rights reserved.

Northampton Office: Chancery House, 52 Sheep Street, Northampton, Northamptonshire NN1 2LZ
Rugby Office: Sir Frank Whittle Business Centre, Great Central Way, Rugby, CV21 3XH

We use cookies on this website, you can find more information about cookies here.

powered by totalSOLUTION

Would you like to download our mobile app from the App Store?

Download
x