In April next year a new tax on Scottish property transactions will commence, replacing the existing stamp duty system. From April, the new Land & Buildings Transaction Tax will mean that buyers will not be taxed on sales below £135,000 and will pay 2% on the value of sales up to £250,000.

For most first and second time buyers then, this will mean a reduction in the cost of buying a property. Good news? Well, yes - in theory this should stimulate the market from the bottom. However, when it comes to higher value properties, LBTT will bring noticeable price increases, prompting some experts to predict a slow down in the market as those looking to move into more expensive properties are discouraged.

For now, the market is experiencing an unusual amount of activity for this time of year. This appears to be a result of a 'six-month window' created by the new tax - i.e those that stand to be affected most are getting their property transactions out of the way before April.


Here are the new LBTT rates:

Purchase price

LBTT rate

Up to £135,000


Above £135,000 to £250,000


Above £250,000 to £1,000,000


Above £1,000,000


Here is an example:

LBTT on a house bought for £275,000 is charged at:

0% for the first £135,000, then

2% for the next £115,000 and

10% for the remaining £25,000

So £4,800 must be paid in LBTT.


Under stamp duty, house buyers paid one per cent of the property value on sales over £125,000, three per cent on sales over £250,000 and four per cent on sales over £500,000, with higher rates for homes more than £1 million and £2m.

The Scottish government have created a LBTT calculator which you can download by clicking HERE

If you have any questions about the new tax and how it relates to your situation please do not hesitate to get in touch with one of our solicitors.


Blair Cadell are a leading firm of Edinburgh solicitors, dealing in a wide range of property, business, tax and personal legal services.