Scottish Budget 2023 to 2024 changes to Land and Buildings Transaction Tax (LBTT)

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15 December 2022

The Scottish Government has today announced as part of its 2023 to 2024 Scottish Budget that the rate of Additional Dwelling Supplement (ADS) will increase to 6%. The revised rate will apply to contracts entered into on or after 16 December 2022. For contracts entered into on or before 15 December the previous rate of 4% will apply. 

Revenue Scotland will update the SETS system and its online guidance and calculators in advance of the rate change coming into effect.

Read the full Budget Statement 2023-24.

Draft LBTT returns

If you started a draft tax return prior to 16 December 2022 for:

  • A tax return where the effective date is 15 December 2022 or earlier: the draft can be submitted as the ADS will have been calculated at 4%.
  • A tax return where the effective date is 16 December 2022 or later will need to be recalculated for the system to refresh the ADS to calculate at 6%.
  • A tax return where the effective date is 16 December 2022 or later where the contract is prior to the 15 December 2022: please check the calculation - if required you can make a manual adjustment to the SETS calculation by clicking ‘Edit transaction details’ in the ‘About the transaction’ section of the return.

Please check the expected ADS result prior to submission.

Note: If a PDF version of the original draft return has been created and downloaded from SETS, it will also have a figure of ADS calculated that is based on the previous rate. You may therefore wish to download and save or print a new PDF version of the draft return after updating the tax calculation.

Conditional contracts

If the contract is conditional (i.e. subject to suspensive conditions), the contract date will usually still be taken as the date that the conditional contract was entered into/signed. This is because a binding contract has been entered into at this point. Where we believe this rule may have been abused, we will make contact with the relevant parties to ascertain if the return needs to be amended and any additional tax paid.

To check if you need to pay the ADS when you buy a residential property in Scotland, please read our general guidance on Additional Dwelling Supplement (ADS).