Page 21 - ESPC_Dec24

EXPERT ADVICE
E XPERT ADVICE DREAM HOMES
LBTT: A guide for homebuyers in Scotland A
West End wonder

Aimee Orrock of ESPC Chartered firm Gilson Gray shares everything you
need to know about LBTT when buying a property.

he Land and Buildings Transaction Tax particular tax band. It’s important to factor this
(LBTT) was introduced in 2015 to replace into your budget.
TUK Stamp Duty after Scotland gained Searching for a slick home close to the city centre? This stylish flat
control over property taxes. Since then, LBTT Exemptions and reliefs could be just what you’re looking for.
has become an essential part of the property- Certain buyers benefit from exemptions/
buying process, applying to all residential reliefs. For example, first-time buyers pay
property transactions in Scotland. The tax is paid no LBTT on properties up to £175,000, and
by the buyer, and must be settled within 30 days reduced tax on homes between £175,000 and
of completing the transaction. £250,000. Buyers inheriting property may
also be exempt.
As of 2024, the LBTT rates are:
The Additional Dwelling Supplement
• Up to £145,000: No tax
(ADS)
• £145,001 to £250,000: 2%
In addition to LBTT, those buying a second
• £250,001 to £325,000: 5% home or buy-to-let property face a 6%
• £325,001 to £750,000: 10% surcharge (ADS) on properties over £40,000.
• Over £750,000: 12% Buyers who are selling their main residence
to purchase a new main residence will not
be liable to pay ADS regardless of whether
How LBTT is calculated: A step-by-step or not they own other properties so long
approach as the completion date of the sale of their
LBTT is calculated progressively, meaning that existing main residence is no later than the
different portions of the property’s value are completion date of their onward purchase. If
taxed at different rates. For example, if you buy the completion date of their sale will not occur
a property for £300,000, here’s how the tax is prior to the completion date of their onward
calculated: purchase, the buyer will have to pay the ADS
• The first £145,000 is tax-free. but can claim it back so long as they complete
their sale within 36 months of the effective
• The next £105,000 (from £145,001 to £250,000) date (the completion date of their purchase).
is taxed at 2%, which equals £2,100.
• The remaining £50,000 (from £250,001 to Understanding LBTT and ADS is vital hen you imagine a Saturday morning Located at the end of the beautiful Douglas
£300,000) is taxed at 5%, which equals £2,500. in your dream home, what do you Crescent, with its elegant Victorian architecture,
for homebuyers in Scotland, to avoid Wsee? If your imagination leads you overlooking the exclusive Douglas Crescent
unexpected costs and ensure that you
So, the total LBTT due on a £300,000 property benefit from any available reliefs. A trusted to a sleepy coffee in a bright kitchen, before Gardens, this spectacular three-bedroom flat
would be £4,600 (£2,100 + £2,500). solicitor estate agent can help you to a wander along the winding Water of Leith is a showstopping, yet sophisticated, place to
understand your tax obligations and provide (perhaps stopping for a pastry, or maybe some call home. Just a short walk from Princes Street,
the New Town, Haymarket and Stockbridge,
flowers on the way), finishing up with a stop in
This means you only pay the higher rate on the a detailed quote to ensure you’re fully any of the charming boutiques or cafes of the the property offers easy access to everything
portion of the property price that falls within that prepared for your purchase.
West End, or even a trip to the nearby Modern Edinburgh is best-known for, all while enjoying
National Galleries, then this stunning property a feeling of solitude and peace.
may be the one for you.
For more from Gilson Gray, visit gilsongray.co.uk or call 0131 253 2993.
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