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LBTT + ADS Scotland 2026/27 — Buy-to-Let
Buy-to-let and second-home purchases attract standard LBTT plus the 8% Additional Dwelling Supplement (ADS) on the full purchase price. Total property tax on £1,000,000: £158,350.
Standard LBTT
£78,350
ADS (8%)
£80,000
Total property tax
£158,350
Seven figures buys Scotland's finest residential properties: complete Heriot Row townhouses, principal Edinburgh estates, historic Scottish tower houses with grounds, and showpiece country houses that appear in Country Life and Christie's International Real Estate. Annual transactions above £1m in Scotland number around 150–200. This market operates largely through specialist estate agents with access to off-market properties.
Unlike LBTT which uses progressive bands, ADS is a flat 8% on the entire purchase price — it is not just on the portion above a threshold.
| ADS rate | 8% |
| Full purchase price | £1,000,000 |
| ADS = 8% × £1,000,000 | £80,000 |
| Standard LBTT | £78,350 |
| Total (LBTT + ADS) | £158,350 |
Standard LBTT: £86,850. ADS: £80,000. Total: £166,850. Scotland's combined LBTT plus ADS at this level represents roughly 16.7% of the purchase price — a material drag on investment returns that distinguishes Scottish prime BTL from comparable English or international markets. Institutional and family office investors at this level typically use Scotland-domiciled limited companies for income tax efficiency while accepting the LBTT position.
If you sell your previous main residence within 36 months of this purchase (for purchases from 1 April 2024), you can apply to Revenue Scotland for a full refund of the ADS paid (£80,000 on £1,000,000).
At a typical 300.0% gross yield for this price tier, a £1,000,000 rental property generates:
| Annual gross rent (300.0% yield) | £3,000,000 |
| Monthly gross rent | £250,000 |
| Total acquisition tax (LBTT + ADS) | £158,350 |
| Months to recover acquisition tax at gross rent | 1 months |
Gross yield figures are illustrative. Net yield will be lower after mortgage interest, management fees, maintenance, void periods, insurance, and income tax on rental profit.
Since April 2020, individual landlords in Scotland (as across the UK) can no longer deduct the full mortgage interest cost from rental income for income tax purposes. Instead, you receive a 20% tax credit on mortgage interest payments. Higher and Advanced rate Scottish taxpayers are effectively taxed on rental income before interest, making leveraged buy-to-let significantly less profitable than pre-2017. Consult a tax adviser before purchasing.
| Scotland — standard LBTT | £78,350 |
| Scotland — ADS (8%) | £80,000 |
| Scotland total | £158,350 |
| England — standard SDLT | £43,750 |
| England — additional property surcharge (5%) | £50,000 |
| England total | £93,750 |
Scotland's ADS rate is 8% vs England's 5% surcharge, making buy-to-let acquisition costs higher in Scotland at most price points.
ADS stands for Additional Dwelling Supplement — a surcharge on top of standard LBTT that applies when you buy an additional residential property in Scotland while already owning one. The rate is 8% of the full purchase price (not just the amount above a threshold). It applies to buy-to-let purchases, second homes, and holiday lets where the price is £40,000 or more.
ADS applies on a £1,000,000 purchase if you own another residential property anywhere in the world on the day of completion. At 8% of £1,000,000, ADS is £80,000. This is payable on top of standard LBTT of £78,350, bringing the total property tax to £158,350. ADS does not apply if £1,000,000 is under £40,000, or if you are replacing your main residence on the same day.
Yes. If you sell your previous main residence within 36 months of this purchase (for purchases from 1 April 2024; the pre-April 2024 window was 18 months), you can apply to reclaim the ADS paid (£80,000 on a £1,000,000 purchase). Revenue Scotland administers the refund — see our ADS refund guide for full details.
ADS only applies if you already own another residential property on the day of completion. First-time buyers, by definition, don't own any property — so ADS does not apply to them. However, first-time buyers also cannot claim both FTB LBTT relief and ADS exemption at the same time, as the two scenarios are mutually exclusive.
Use the full LBTT calculator to model any purchase price with standard, FTB, and ADS scenarios side by side.
Open LBTT Calculator →Other buyer types at £1,000,000:
These figures are estimates based on 2026/27 LBTT and ADS rates. ADS is refundable if you sell your previous main residence within 36 months (purchases from April 2024) — see our ADS refund guide. Always confirm the final liability with your solicitor before exchanging.