Loading...
Loading...
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 £145,000: £11,600.
Standard LBTT
£0
ADS (8%)
£11,600
Total property tax
£11,600
Key threshold: This is exactly the standard LBTT nil-rate threshold — standard buyers and first-time buyers both pay £0 LBTT. Securing the price at or below £145,000 eliminates LBTT entirely for all buyer types.
£145,000 sits exactly at the standard LBTT nil-rate threshold, making it a psychologically significant pricing anchor in Scottish estate agency. Properties include one and two-bedroom flats in most Scottish towns, ex-local-authority two-bed properties in good condition, and some rural cottages requiring modernisation.
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 | £145,000 |
| ADS = 8% × £145,000 | £11,600 |
| Standard LBTT | £0 |
| Total (LBTT + ADS) | £11,600 |
With zero standard LBTT at this price, your entire acquisition tax cost is the ADS of £11,600. That represents about 19 months of gross rent at 6.5% yield — a reasonable payback before net profit begins to accumulate. This price tier is a common entry point for first-time BTL investors due to the nil LBTT, lower ADS, and accessible mortgage criteria.
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 (£11,600 on £145,000).
At a typical 650.0% gross yield for this price tier, a £145,000 rental property generates:
| Annual gross rent (650.0% yield) | £942,500 |
| Monthly gross rent | £78,542 |
| Total acquisition tax (LBTT + ADS) | £11,600 |
| 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 | £0 |
| Scotland — ADS (8%) | £11,600 |
| Scotland total | £11,600 |
| England — standard SDLT | £400 |
| England — additional property surcharge (5%) | £7,250 |
| England total | £7,650 |
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 £145,000 purchase if you own another residential property anywhere in the world on the day of completion. At 8% of £145,000, ADS is £11,600. This is payable on top of standard LBTT of £0, bringing the total property tax to £11,600. ADS does not apply if £145,000 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 (£11,600 on a £145,000 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 £145,000:
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.