Scottish LBTT Additional Dwelling Supplement increase to 4%

Scottish LBTT Additional Dwelling Supplement increase to 4%

20 Dec Scottish LBTT Additional Dwelling Supplement increase to 4%

The Scottish government has announced in its recent budget that it will be increasing the Land and Building Transactions tax (LBTT) additional dwelling supplement from 3% to 4%.

This will hit any additional landlord or second home purchases and if approved by the Scottish Parliament will be effective from the 25th January 2019.

What is ADS and how could it affect separating spouses and separating partners who are hoping to buy a new home?

Additional Dwelling Supplement (ADS) was introduced in April 2016 for people buying an additional residential property over and above their main home. ADS is 3% of the total purchase price of an additional residential property purchase of £40,000 or more, soon to be increased to 4% which is payable in addition to LBTT.

ADS is payable mainly someone buys an additional property for investment or recreational purposes, such as a buy-to-let property or a second/holiday home. However, it can also include instances such as a young couple retaining one of their existing flats as a pension and buying a family home, or someone who has inherited a home or bought a home under the Right to Buy scheme.

In theory, ADS is not payable where a person is replacing their principal residence but, if the new residence is purchased first, the ADS will have to be paid within 30 days of purchase and the purchaser will only be able to reclaim this if the original residence is sold or transferred within 18 months.

The rise was part of a government drive to support first-time buyers and assist people as they move up the property ladder.

If you are looking to sell your property, the first thing you’ll need is a Home Report. We are RICS Charted Surveyors specialising in Home Reports across Scotland from as little as £85. Get in touch today to arrange a time to suit you. We offer early morning or evening and weekend appointments. Call us on 0131 608 0175 or email us at

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