Land and Buildings Transaction Tax

Reviews of a lease accounted for approximately £0.6m of LBTT declared due in 2023/24. This makes up roughly 0.1% of total LBTT for the year.

Approximately 5,500 reviews of a lease were received in 2023/24, of which 4,010 (73%) declared no change in the LBTT due from the original lease return (meaning LBTT declared due on review was £0). 940 (17%) declared further LBTT due and 550 (10%) claimed a repayment of LBTT.

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Sub-Scotland

This section contains breakdowns of LBTT data at local authority level, as well as by ITL 2 (International Territorial Level). The figures here are referred to as estimates, due to the fact that location data for a proportion of LBTT returns has been imputed. This is necessary as we use the postcode stated on LBTT returns to assign them to higher geographies and not all LBTT returns are submitted with a valid postcode, primarily non-residential returns.

In 2023/24, 99% of residential LBTT returns and 74% of non-residential returns contained a valid postcode.

In order to improve the completeness of our address data, we match records without a valid postcode to data provided by Registers of Scotland and link on the postcode recorded alongside the title registration. If we cannot find a postcode using this method, we find a “donor” record which is similar to our incomplete “recipient” record, based on information on the LBTT return, and use this to impute geographical information.

This method provides robust estimates for residential and non-residential conveyances. The estimates for residential conveyances are more reliable because residential conveyance returns are more likely to include a valid postcode and more likely to match to a title registered with Registers of Scotland.

For the estimates presented here of returns submitted in 2023/24, location was imputed using the donor method for less than 1% of residential returns and 19% of non-residential returns.

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Sub-Scotland: Residential LBTT

Figure 10: Estimates of LBTT declared due, excluding ADS, for residential conveyances by local authority, 2023/24 (£Millions)

In 2023/24, City of Edinburgh accounted for £115.7 million (27%) of residential LBTT declared due, excluding ADS, by far the biggest contribution from a single council area. Next highest was Glasgow City, making up 8% of total residential LBTT at £34.4 million. City of Edinburgh has accounted for 27% to 34% of LBTT revenue, excluding ADS, each year since 2015/16. No other local authority has ever accounted for more than 9%.

The 3 local authorities with the highest mean LBTT declared due per transaction for residential returns were:

• City of Edinburgh at £11,100
• East Renfrewshire at £10,600
• East Lothian at £9,800

The lowest averages were for:

• West Dunbartonshire at £1,200
• Na h-Eileanan Siar at £1,300
• North Ayrshire at £1,500

From 2021/22 to 2022/23, LBTT revenues increased in 26 of the 32 local authorities, however from 2022/23 to 2023/24, LBTT revenues increased in only 7 of the 32 local authorities. North Lanarkshire saw the largest increase with a rise of £0.8 million (10%), while the largest decrease on the previous year was in City of Edinburgh, which saw £15.7 million (12%)  less residential LBTT declared than in 2022/23.

Figure 11: Estimated number of residential conveyance returns received by local authority   

Glasgow City had the most residential conveyance returns received in 2023/24 with 10,560 returns (11% of the total), just ahead of City of Edinburgh with 10,420 returns (11% of the total).

Numbers of residential conveyances decreased in 27 of 32 local authorities from 2022/23 to 2023/24, with only five local authorities seeing more residential LBTT returns received than last year.

The council areas which saw an increase in residential returns were:

• Orkney Islands with an increase of 13%
• North Ayrshire with an increase of 3%
• West Dunbartonshire with an increase of 3%
• Na h-Eileanan Siar with an increase of 3%

The council areas with the largest percentage decrease in number of returns on the previous year were:

• Aberdeenshire with a decrease of 17%
• Dundee City with a decrease of 14%
• Angus with a decrease of 14%
• Midlothian with a decrease of 14%

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Sub-Scotland: Additional Dwelling Supplement 

Figure 12: Estimates of gross residential ADS declared due (£Millions) by local authority and percentage which is intended to be reclaimed by taxpayer, 2023/24 

City of Edinburgh accounted for 20% of gross residential ADS declared due in 2023/24 with around £47 million, an increase of £3.5 million on the previous year. Glasgow City accounted for the second-largest share of residential ADS, making up 11% of the total with £25.4 million.

The council area with the highest proportion of gross ADS coming from taxpayers who stated they did not intend to reclaim it was Na h-Eileanan Siar at 82%. This figure was lowest in Inverclyde at 50%.

The council areas with the greatest number of returns with ADS declared due were:

• Glasgow City with 2,660
• City of Edinburgh with 2,490
• Fife with 1,360

At 92%, Glasgow City also had the highest proportion of returns with ADS due, where the stated intention was to not reclaim ADS (distinct from the data shown in figure 13, which displays the percentage of the gross ADS amount in £ which is marked for reclaim). The lowest figure was for Orkney Islands, where 54% of returns with ADS due stated no intention to reclaim it.

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Sub-Scotland: Residential conveyances not replacing a main residence  

Figure 13: Estimates of the percentage (%) of all residential conveyance returns received where the taxpayer did not intend to reclaim ADS declared due, by local authority and year 

The data shown in Figure 13 is an indicative measure of the percentage of all residential conveyances where the taxpayer is purchasing an additional property (e.g. buy-to-let dwelling or a second home) rather than replacing their main residence.

In 2023/24, 26.0% of all residential conveyances in Na h-Eileanan Siar were purchases of an additional property, the highest percentage of any local authority. Aberdeen City was a close second at 25.8%.

The lowest figure was in Midlothian, where only 11.7% of residential LBTT returns were purchases of an additional property. Midlothian has been lowest in five of the past six years.  

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Sub-Scotland: Residential tax bands

Figure 14: Distributions of residential LBTT returns by local authority and tax band, 2023/24

 

Figure 14 shows the distribution of residential transactions by tax band. The two highest bands (£325,000 - £750,000 and £750,000+) are combined to protect taxpayer confidentiality as separating them might reveal low numbers in some of the smaller local authorities.

The council areas with the highest proportion of returns in the top grouped (£325k +) band were:

• East Renfrewshire at 40%
• East Lothian at 37%
• City of Edinburgh at 35%

For 8 of the 32 local authorities, more than 50% of residential transactions fell into the nil-rate tax band (£0-145k). West Dunbartonshire had the highest proportion (62%) of transactions in this band, with City of Edinburgh having the lowest (8%).  

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Sub-Scotland: Non-residential conveyances 

Sub-Scotland LBTT data is analysed by ITL 2 areas instead of local authorities for non-residential returns, to minimise the risk of disclosing protected taxpayer information.

ITL stands for International Territorial Levels which are geographical areas used in UK statistics. These areas are currently identical to the Europen Nomenclature of Units for Territorial Statistics which were used in previous versions of this publication.

Scotland is divided into five of these units, mainly by grouping together Council Areas. These five areas are: Highlands and Islands, North Eastern Scotland, Eastern Scotland, West Central Scotland, and Southern Scotland.

 

Figure 15: Estimates of non-residential LBTT declared due by ITL 2 area and year

Eastern Scotland consistently has the largest share of non-residential LBTT declared due, accounting for £69 million (43%) in 2023/24. The highest number of returns also comes from Eastern Scotland at 2,200 (34%). This is largely due to City of Edinburgh being in this region, aided by Fife, West Lothian and Perth and Kinross, which frequently have fairly high non-residential LBTT. West Central Scotland is consistently second highest due to Glasgow City being within its boundaries, but lacks other areas with high non-residential LBTT apart from North Lanarkshire.

North Eastern Scotland saw an increase in non-residential LBTT in 2023/24 compared with the previous year of 3%. All other ITL 2 areas saw decreases in non-residential LBTT in 2023/24. Southern Scotland saw the biggest decrease with a 21% drop, followed by West Central Scotland (-20%), Highlands and Islands (-16%) and Eastern Scotland (-14%).

The number of non-residential returns fell in all ITL 2 areas in 2023/24 compared to the previous year. Highlands and Islands saw the biggest drop in returns, dropping by 14%, followed by Eastern Scotland and West Central Scotland (-8%), Southern Scotland (-3%) and North Eastern Scotland (-1%).

The large drop in LBTT in Southern Scotland and West Central Scotland despite relatively stable numbers of returns compared with the previous year reflects the fact that for non-residential LBTT, a small number of very high value transactions can greatly affect the total LBTT due. For this reason, care should be taken when interpreting annual trends in non-residential LBTT by ITL 2 area. 

 

Figure 16: Estimated number of non-residential returns by ITL 2 area and year

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LBTT Reliefs

There are a number of tax reliefs which provide whole or partial relief from LBTT and ADS. Common reliefs include:

• First-Time Buyer relief, which currently relieves LBTT on the first £175,000 of the consideration payable for first time buyers, subject to conditions
• Charities relief, where the buyer in a land transaction is a charity and certain conditions are met
• Group relief, where at the effective date of a land transaction the seller and buyer are both companies in the same group, allowing companies to move property within a corporate group structure without a liability for LBTT being incurred.

Due to known data quality issues with reliefs information collected from LBTT returns, figures in this section are presented as estimates. These issues only impact a small number (less than 1%) of returns and the total figure for LBTT foregone to reliefs is not affected. Further information is available in Appendix C.

Table 9: Estimated LBTT revenue forgone to reliefs and number of LBTT returns received in which some LBTT revenue has been forgone to reliefs, by year (combined Residential and Non-Residential)

Year	LBTT revenue excluding ADS forgone (£Millions)	ADS revenue forgone (£Millions)	All revenue forgone (£Millions)	Returns in which some LBTT excluding ADS was forgone to relief	Returns in which some ADS revenue was forgone to relief	All returns in which some revenue was forgone to relief*
2019/20	106.2	5.7	111.9	15,390	410	15,530
2020/21	100.8	3.6	104.4	3,020	240	3,030
2021/22	127.0	5.3	132.3	17,680	310	17,710
2022/23	102.3	13.2	115.5	17,590	870	17,850
2023/24	156.9	27.1	184.0	17,660	1,780	18,230

*This column is not the sum of the two preceding columns. Some returns may have relief on the LBTT and ADS, so they are only counted once in this column.

Roughly £184 million of LBTT / ADS revenue was foregone to reliefs in 2023/24. This is the highest figure on record and marks a 59% increase on the previous year, despite the number of LBTT returns claiming any kind of relief only increasing around 2%.

ADS foregone to relief rose by almost £14 million (105%) in 2023/24. The number of returns in which some ADS was foregone to reliefs also increased by 105%. The relief primarily responsible for driving the increase in ADS foregone to reliefs was Relief for certain acquisitions of residential property, which accounted for almost 47% of ADS foregone to reliefs. Charities relief and ADS relief of 6 or more dwellings were the next highest contributors. Detailed explanations of all reliefs are available on the relief section of the Revenue Scotland website.

The relatively low number of claims for relief in 2020/21 can be mostly attributed to the temporary increase in the nil-rate tax band. During this period, a large number of transactions which normally would have qualified for first time buyer relief, simply had no LBTT due, making the relief temporarily redundant.

Figure 17: Estimated LBTT revenue, including ADS, forgone to reliefs by type of relief and year

The primary driver in the increase in LBTT (including ADS) foregone to reliefs between 2022/23 and 2023/24 is Group Relief, which more than doubled to a figure of £105 million. This accounts for 57% of the total LBTT foregone to reliefs for the year. More generally, Group Relief is by far the biggest component of LBTT foregone to relief and is the main influence on annual changes in total reliefs.

The second highest proportion of LBTT forgone to relief (11%) came from Multiple dwellings relief. The third highest proportion (8%) is shared between Other reliefs, which groups together all reliefs outside the six biggest single contributors. 

In 2022/23, Charities relief made up the second highest proportion of LBTT forgone to relief at 17%, however the proportion has dropped to 7% in 2023/24.

Table 10: Estimated LBTT revenue forgone to reliefs and number of LBTT returns received in which some LBTT revenue has been forgone to reliefs by type of property and year

Year	LBTT forgone (£ millions)			Number of LBTT returns in which some LBTT revenue has been forgone to reliefs
	Residential	Non-residential	All	Residential	Non-residential	All
2019/20	17.3	94.6	111.9	14,740	790	15,530
2020/21	16.2	88.2	104.4	2,310	730	3,030
2021/22	35.5	96.8	132.3	16,950	760	17,710
2022/23	24.5	91.0	115.5	17,010	840	17,850
2023/24	37.3	146.7	184.0	17,360	870	18,230

Approximately 18% of residential returns in 2023/24 had some LBTT foregone to reliefs and 13% of non-residential returns claimed some form of relief.

Residential returns made up 95% of returns in which some LBTT was forgone to reliefs in 2023/24. However, non-residential returns made up the majority of the total value of LBTT forgone to reliefs (80%).

The reason that most returns claiming relief are residential is that First-Time Buyer relief is by far the most commonly claimed relief. However, despite accounting for the vast majority of claims for relief, First-Time Buyer relief accounts for only a small portion of the estimated LBTT revenue foregone to reliefs. This is because First-Time Buyer relief provides a maximum of £600 relief from LBTT per transaction, as it only applies to the first £175,000 of the consideration. This is unlike other relief types which can relieve the entire tax liability of potentially much larger transactions.