01 Sep 2014

The Land and Buildings Tax (Scotland) Act

The Land and Buildings Tax (Scotland) Act

Chris Comfort, Senior Solicitor, looks at the impact of The Land and Buildings Tax (Scotland) Act which sees an end to UK Stamp Duty Land Tax (SDLT).

Chris Comfort, Senior Solicitor, looks at the impact of The Land and Buildings Tax (Scotland) Act which sees an end to UK Stamp Duty Land Tax (SDLT). 

The Land and Buildings Tax (Scotland) Act 2013 received Royal Assent on 31 July 2013. The Land and Buildings Transactions Tax (LBTT) will be introduced on 1 April 2015 in Scotland and will replace the UK Stamp Duty Land Tax (SDLT). 

The current UK Stamp Duty Land Tax rates and thresholds are as follows: 

  • Up to £125,000 – Zero, 
  • £125,000 to £250,000 - 1% 
  • £250,000 to £500,000 - 3% 
  • £500,000 to £1 million - 4% 
  • £1 million to £2 million - 5%
  • Over £2 million -  7%


The statistics show the number of properties sold in Scotland by their sale price in 2013, using data collected by the Registers of Scotland. As you will notice, there are peaks in numbers of sales just below UK Stamp Duty Land Tax thresholds and very few sales just above these thresholds.

This reflects the "slab" type format of the current Stamp Duty Land Tax, where the whole of the price is charged at the highest applicable rate. The Land and Buildings Transactions Tax however, is to be a “progressive” tax meaning that the tax will be charged at various rates depending on different tax-bands.  

The tax rates and bands for The Land and Buildings Transactions Tax will be announced in Autumn/Winter 2014, as part of the budget process.  Until then the impact of the Act is uncertain but has nevertheless caused plenty of speculators to warn that the average house buyer will be negatively affected. 

The Scottish Government have announced that the structure will include a nil rate band and at least two other progressively increasing bands. Current proposals indicate that an increase is likely for those buying between £125,000 and £300,000 based on “working examples”. It will be interesting to see if the draft budget lives up to this and leaves those in Scotland paying more than the rest of the UK, given the current political climate.


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