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'Additional homes supplement' legislation

Published: 28 Jan 2016 09:28

LBTT (Amendment) (Scotland) Bill published.

New legislation to introduce a supplement on purchases of additional residential properties has been published by the Scottish Parliament today.

The Land and Buildings Transaction Tax (LBTT) (Amendment) (Scotland) Bill proposes a supplement on the purchase of additional homes, for example second homes or buy-to-let properties.

It was announced last month by Deputy First Minister John Swinney as part of the Scottish Government's draft 2016-17 budget.

The planned supplement is three percent of the total price of the property for all relevant transactions above £40,000, and will be paid in addition to the current LBTT rates.

The draft Budget estimated that the new supplement would raise about £23 million in 2016-17, and it is intended to take effect from 1 April 2016.

Mr Swinney said:

"Our priority is to make sure that first time buyers have the greatest possible chance to get a foot on the property ladder.

"That is why I decided to take action to avoid any potential distortions which could arise in Scotland from the new higher rates of stamp duty land tax payable on the purchase of additional residential properties, announced by the Chancellor of the Exchequer in his Autumn Statement on 25 November 2015.

"This is particularly relevant to the purchase of additional residential properties, at the lower end of the market, which could make it more attractive to invest in such properties in Scotland compared to other parts of the UK.

"Our LBTT additional homes supplement will ensure that opportunities for first time buyers to enter the housing market in Scotland remain as strong as they possibly can."

Notes to editors

The legislation can be viewed at

As with all aspects of LBTT, Revenue Scotland will administer the higher rates introduced by this Bill, with support from Registers of Scotland (RoS).

Table 1 : Residential property rates

Property value

LBTT rate**

LBTT rate + supplement*

Up to £40,000


0% + 3% = 3%

£40,000 to £145,000


0% + 3% = 3%

£145,000 to £250,000


2% +3% = 5%

£250,000 to £325,000


5% + 3% = 8%

£325,00 to £750,000


10% +3% = 13%

Over £750,000


12% +3% =15%

* Supplement only payable on transactions above £40,000. The 3% supplement would be applied to the whole purchase price and not just the proportion of the price above £40,000.

** the supplement is capable of applying to transactions to which non-residential rates apply where the transaction includes the purchase of a dwelling