Scotland announces nil rate band increase for LBTT

13 July: Following the Summer Statement announcement of the increase to the stamp duty land tax nil rate band, Scotland has announced an increase in its nil rate band for residential property to £250,000 effective from 15 July.

The increase in the nil rate band of land and buildings transaction tax (LBTT) for residential property in Scotland will apply to transactions with an effective date on or after 15 July 2020 and will apply until 31 March 2021.

The nil rate band is increased from £145,000 to £250,000, meaning that the residential property rates change as set out in the table below.

Purchase price	LBTT rate for residential property transactions with an effective date up to 14 July 2020	LBTT rate for residential property transactions with an effective date on or after 15 July 2020
Up to £145,000	0%	0%
Above £145,000 to £250,000	2%	0%
Above £250,000 to £325,000	5%	5%
Above £325,000 to £750,000	10%	10%
Over £750,000	12%	12%

Where the purchase price is over £250,000 in the period from 15 July 2020 to 31 March 2021, buyers will achieve a LBTT saving of £2,100.

The announcement indicates that rates for the additional dwelling supplement (ADS) and non-residential LBTT remain unchanged. However, as the ADS is 4% over the normal rates of LBTT for residential property, ICAEW’s Tax Faculty assumes that second home buyers and buy-to-let landlords in Scotland will also benefit from the increase in the nil rate band.