Scotland Stamp Duty Calculator 2024 - A Guide for Scottish Property Investors

As mentioned, in Scotland, one of the essential charges that influence the cost of purchasing a residential property is the Land and Buildings Transaction Tax. While it is most commonly recognised as the tax associated with residential property purchases, Land and Buildings Transaction Tax extends to non-residential acquisitions and leases, making it a comprehensive fiscal framework.

For this blog, however, we’ll keep focused on what this tax means for those purchasing a residential property in Scotland, either as a first-time buyer or those intending to make it an additional residence or rental property.

Land and Buildings Transaction Tax stands as the Scottish counterpart to Stamp Duty Land Tax (STLD), highlighting the autonomy of the Scottish government to make its own decisions regarding property-related taxes and other fiscal policies.

Any notable changes to Land and Buildings Transaction Tax will be made exclusively by the Scottish government and, therefore, announced in their annual fiscal budget. Revenue Scotland administers and collects the tax, so if you have any queries or concerns regarding this tax, you should refer to their official website.

With this in mind, it’s important to note that any announcements by the UK government concerning Stamp Duty Tax do not apply in Scotland. This is often a source of confusion for those purchasing a property in the UK and wondering how much they owe when paying stamp duty.

Put simply, then, if you’re purchasing a property in Scotland, it is Land and Buildings Transaction Tax that applies to you and not Stamp Duty Tax.

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As mentioned above, how much tax you pay depends mainly on the value of the property you purchase and its intended purpose. For instance, the Land and Buildings Transaction Tax you owe will differ if you’re buying a property to live in, intend to rent it out, or want to use it for commercial purposes.

In short, the amount you need to pay depends on a few key factors:

• When you bought the property
• How much you paid for it
• Its intended use

Having changed in April 2021, the current Land and Building Transaction Tax rates are set to remain in place at least until after 2026, along with the present guidelines on first-time buyer relief.

So, if you plan to purchase a property in Scotland any time in the next two years, the following tax bands will apply to you.

For those purchasing a primary residence in Scotland, you are not required to pay any Land and Buildings Transaction Tax if that property is worth less than £145,000. From this price up to £250,000, you must pay a 2% tax on the property’s value. After that, as property values rise from £250,000 to over £750,000, the tax rates increase to 5%, 10% and 12% respectively.

Take a look at the table below, which shows the Land and Buildings Transaction Tax Rates and bands for residential properties as of April 2021:

Again, to determine precisely how much you are required to pay, you can use the Land and Buildings Transaction Tax calculator on this page or visit the Revenue Scotland website. However, this table is also a valuable point of reference.

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So then, how does this affect buy-to-let investors purchasing a Scottish rental property?

Much like in England, Wales and Northern Ireland, if you’re purchasing a property in Scotland for buy-to-let purposes, it’s essential to understand that you’ll likely be paying a higher Land and Buildings Transaction Tax rate.

The additional dwelling tax rate will apply if the property is worth more than £40,000. If it isn’t, you’re off the hook. But as the average UK property price now stands at over £292,000, it’s unlikely that you’ll find a buy-to-let property as cheap as this.

For additional properties in Scotland worth up to £145,000, owners must pay 6% on the purchase price. Following this, the subsequent tax rates are 8% on properties worth £145,001 to £250,000, 11% on those priced between £250,001 and £325,000, 16% for those between £325,001 and £750,000, and finally, 18% for anything over £750,000.

We’ve included the following table to refer to any time you’re wondering how much stamp duty you must pay on a Scottish property if it’s an additional dwelling or a buy-to-let purchase.

However, it’s important to remember that these rates will change. To ensure you’re current on the latest Land and Buildings Transaction Tax rates, we recommend referring to the official Scottish government website, which will be updated accordingly.

Learn More: Want to know the best property to invest in or how to get into UK real estate? Whether buying property as a company or going solo, our expansive beginner investment guides offer everything you need to know before starting!

Taxes such as the Land and Buildings Transaction Tax make up a significant portion of the Scottish budget and, as such, are essential for the funding of public services.

A relatively recent development, the Land and Buildings Transaction Tax, was brought in to replace Scotland’s UK Stamp Duty Tax in 2015. Since then, this tax has contributed to funding essential services such as healthcare, schools and housing.

According to Revenue Scotland, a total of £82.6m worth of Land and Buildings Transaction Tax was declared by taxpayers in December 2023, highlighting the steady contribution it makes to the Scottish economy.

In the same month, 9,580 notifiable land and building transactions were reported. Additionally, 8,070 residential Land and Buildings Transaction Tax returns were submitted in December last year. Why not learn more about how to get into real estate investment with our property guides.