Where the ADS applies, there is a further 4% charge on the full chargeable consideration added to the LBTT liability for certain transactions with a relevant consideration of £40,000 or more, where the subject-matter of that transaction consists of or includes the acquisition of ownership of a dwelling in Scotland.
The ADS payable for a residential property transaction within the scope of the additional amount of LBTT will therefore be charged on the whole relevant consideration for that transaction.
The most common scenario in which buyers are likely to pay the ADS will be where they are purchasing a buy-to-let dwelling or a second home (or holiday home) in addition to their main home. Further details on how the ADS applies to different transactions can be found in part LBTT10013 of the guidance.
The vast majority of residential property transactions, such as first time buyers purchasing their first property or homeowners moving from one main residence to another, will not be liable to the ADS.
The ADS may also apply to transactions that include both residential and non-residential property, such as a shop with a flat above it. Further details relating to how transactions involving residential and non-residential property may be affected and how the ADS will be calculated for such transactions are included in part LBTT10015 of the guidance.
Please note: The ADS rate was changed to 4% with effect from 25 January 2019. The contract date and the effective date of your transaction will determine whether the changes affect you.
ADS rates for transactions on or after 25 January 2019
ADS is 4% of the ‘relevant consideration’ (usually the purchase price).
ADS rates for transactions prior to 25 January 2019
ADS is 3% of the ‘relevant consideration’ (usually the purchase price).
Where the effective date of a land transaction is on or after 25 January 2019 and the contract for the land transaction was entered into prior to 12 December 2018, the tax rate of 3% for ADS that was in force prior to 25 January 2019 will apply.
Further information can be found at LBTT10080.