The Scottish Government is to introduce a supplement to LBTT on residential transactions, where the purchase of a dwelling results in the buyer owning more than one dwelling, unless the purchase in question is of a dwelling that is to be the buyer’s main residence and he has sold a previous main residence within 18 months prior to the purchase. 

The supplement will consist of an additional 3% of the whole of the purchase price. In other words the buyer must pay LBTT at the prevailing rates at the time, and an additional 3% of the price. The supplement will however only apply to prices of £40,000 or over.

The supplement is principally designed to target those in the market for second or holiday homes and buy-to-let properties. The underlying policy reasons for this are to protect the first time buyer, by discouraging second home buyers, and thus allow more properties to be available for purchasers entering the market for the first time. A similar supplement is proposed for stamp duty land tax on residential properties in England and Wales. The supplement will apply from 1 April 2016.

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