LBTT & ADS Update

The Land and Buildings Transaction Tax (Tax rates and Bands etc.) (Scotland) Amendment Order 2018 came into force on 25^th January 2019 and has implemented a number of changes to the current system.

In relation to commercial or non-residential property, there has been a reduction in the lower rate of non-residential LBTT and an increase in the upper rate. 

For non-residential property, the rate of tax is determined in accordance with percentages of the overall price or “chargeable consideration”. No LBTT is due on commercial property purchased up to £150,000, however, 1% (previously 3%) is charged on property between £150,000-£250,000 and 5% (previously 4.5%) on those over £250,000. The starting threshold of the upper rate has also been reduced by the Order from £350,000 to £250,000.

Similar to most taxes, LBTT is charged at the appropriate rate on the purchase price within that band. So if a commercial premises is purchased for £300,000, the LBTT is charged at:-

• 0% for the first £150,000
• 1% for the next £100,000
• 5% for the remaining £50,000

LBTT due = £3,500

A further change implemented by the Order is the increase of Additional Dwelling Supplement (ADS) rate from 3% to 4%. ADS applies to all transaction where an additional residential property is purchased for £40,000 or more and is charged in addition to LBTT. For example, a second home purchased at £250,000 would incur LBTT of £2,100 and ADS of £10,000. 

The new commercial rates and increase in ADS apply to transaction settling on or after 25^th January 2019.

If you wish to discuss anything relating to this or any other Commercial Property issue, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.