Revenue Scotland introduced the Additional Dwelling Supplement (ADS) from 1 April 2016, through primary legislation by adding Schedule 2A to the Land and Buildings Transaction Tax (Scotland) Act 2013.
This was in response to the UK Government's planned introduction of Higher Rates for Additional Dwellings (HRAD) to Stamp Duty Land Tax (SDLT) in England, Wales and Northern Ireland from the same date. Wales then introduced a similar arrangement as part of the Land Transaction Tax (LTT) from April 2018.
The ADS forms part of the Scottish Government's drive to protect and support opportunities for first-time buyers in Scotland. It reinforces the progressive approach in place for LBTT rates and bands. It also raises vital revenue to support public services in Scotland.
The ADS usually applies, when a buyer, or buyers, purchase a dwelling which results in them owning more than one dwelling and they are not replacing their main residence. It is an additional amount of LBTT, charged at 6% of the relevant consideration for a transaction where the total purchase price of an additional dwelling is £40,000 or more.
Changes to the legislation with effect from 1 April 2024
As these changes are not retrospective particular attention should be given to timescales and repayment conditions as these will differ dependant on the effective date of your transaction.
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