The Additional Dwelling Supplement in Scotland

The Additional Dwelling Supplement (ADS) is an extra charge on top of Land and Buildings Transaction Tax (LBTT) when you buy an additional residential property in Scotland, such as a second home, a buy-to-let or a holiday home. For transactions on or after 5 December 2024 the ADS is 8% of the purchase price¹, making Scotland's additional charge the highest of its kind in the UK as of 2025². It sits on top of the ordinary LBTT you would pay anyway, so a buyer of an additional property pays both.

The charge exists to reduce competition for first-time buyers: the Scottish Government introduced it as a supplemental tax on additional residential purchases, payable on top of standard LBTT, with that stated aim³. Revenue Scotland has administered it since 1 April 2016⁴, and the rate has been raised several times since, most recently from 6% to 8% with effect from 5 December 2024⁵.

There are ways out of the charge. The most important one is for people replacing their main home: if you sell your previous main residence within 36 months of buying the new one, and meet the other conditions, you can claim the ADS back with interest¹. Around 11% of taxpayers who submitted LBTT returns with ADS declared due in 2021/22 have since claimed repayment⁶.

ADS is 8% of the whole purchase price

The headline rule is simple: for transactions on or after 5 December 2024, the ADS is 8% of the purchase price¹. It is charged on the whole price, not on a band or on the excess above a threshold, and it is added to the LBTT that would be payable on the same purchase in any event. The Scottish Fiscal Commission forecast that the increase from 6% to 8% would raise £32 million in additional revenue in 2025-26⁵.

The rate has not always been 8%. It began at 3% when the supplement was introduced, rose to 4% for transactions on or after 25 January 2019, to 6% for transactions on or after 16 December 2022, and to 8% for transactions on or after 5 December 2024¹. An independent policy analysis for the Scottish Government notes the rate has risen gradually from 3% of the purchase price of the additional property in 2019 to 8% as of 2025².

Which rate applies to you depends on when the transaction took effect, and, around the December 2024 change, on when the contract was signed. Where the effective date of the transaction is on or after 5 December 2024 and the contract was entered into on or before 4 December 2024, the 6% rate still applies; where both the contract and the effective date fall on or after 5 December 2024, the 8% rate applies¹. The Scottish Parliament's Finance and Public Administration Committee confirms that transactions with an effective date on or after 5 December 2024 are not subject to the increase where the contract was entered into before that date⁹.

For comparison, the equivalent surcharge in England and Northern Ireland, the higher rates of SDLT on additional dwellings, rose from 3% to 5% from 31 October 2024¹⁰. Wales applies its own higher rates of Land Transaction Tax. The full guide to LBTT in Scotland covers the standard rates the ADS sits on top of.

Who pays ADS and who does not

The ADS is charged if you buy a residential property in Scotland and you already own one or more residential properties anywhere in the world, or any buyer in a joint purchase already owns one or more residential properties anywhere in the world, and you are not replacing or selling your only or main residence¹. Three things follow from that. The test is worldwide, so a property in England, Ireland or further afield counts. In a joint purchase, it is enough for one buyer to own another property for the ADS to apply. And the charge is aimed at people ending up with more than one dwelling, not at any particular use of the property.

The charge therefore covers the situations most people associate with it. It is a surcharge on purchases of additional residential properties⁹, and it imposes an amount of tax on transactions involving second homes or buy-to-let properties². A holiday home is caught in the same way, because the rules look at ownership, not at whether the property is let or occupied.

Several groups do not pay, or do not pay in circumstances that might look chargeable at first glance:

• Inherited dwellings. Individuals do not pay LBTT or the ADS on dwellings they inherit, and under beneficiary relief an inherited dwelling does not count towards the number of dwellings owned for ADS purposes¹¹.
• Existing co-owners buying a further share. Where existing co-owners acquire another share in a dwelling they already part-own, they are treated as each owning the whole dwelling, so no ADS is due¹¹.
• Family helpers who are not joint owners. Where a parent helps a child buy a first dwelling, for example with a deposit, and does not jointly own the property, the ADS will not apply if the buyer owns only one dwelling¹¹.
• Joint purchases with a parent. The position changes if the parent goes on the title: where the parent jointly purchases with the child and owns more than one dwelling without replacing their main residence, the ADS will apply¹¹.
• Non-residential property. Generally, the ADS does not apply to non-residential property transactions¹¹.

The rules around family units and replacing main residences were amended with effect from 30 June 2017¹², and the repayment conditions were changed again from 1 April 2024, so the date of a transaction matters throughout. If you are buying with someone else, the page on buying a home jointly explains how joint ownership works, and buying a home in Scotland sets out the Scottish purchase process the ADS sits inside.

The £40,000 threshold and other exclusions

The ADS applies only where the total purchase price of the additional dwelling is £40,000 or more⁴. The Scottish Parliament's Finance and Public Administration Committee puts the same rule as a charge on an additional dwelling purchased for over £40,000⁹, and the Scottish Budget confirms the supplement is payable on purchases of all relevant residential properties for £40,000 and above⁵. Below that price, no ADS is due.

Revenue Scotland's guidance lists the situations in which the ADS will not apply¹:

• you only own one dwelling at the end of the effective date
• the consideration is less than £40,000
• you own an additional property valued at less than £40,000
• you disposed of your only or main residence in the 18 months before purchasing your new main residence

The £40,000 test also works within mixed purchases. Where a single transaction includes both residential and non-residential property, the ADS applies only to the part of the consideration attributable to the residential dwelling, and only if that residential part is worth £40,000 or more; the ADS charged is 8% of the consideration attributable to the residential dwellings¹¹. So a purchase combining a flat and a shop pays the ADS on the flat's share of the price, not on the whole.

The threshold is one reason a small second property, such as a share in a holiday cottage or a low-value plot with a dwelling on it, can escape the charge. The page on whether an LBTT return is needed for a property under £40,000 covers the return side of the same threshold.

Buying six or more homes in one transaction

There is a full exemption from the ADS where six or more residential properties are bought in a single transaction, and it applies to both individuals and non-individual buyers such as companies¹¹. The purchase is treated as non-residential for LBTT purposes and fully exempted from the ADS¹³. The Scottish Parliament's committee describes the same rule: if six or more dwellings are purchased in a single transaction, the purchase is treated as non-residential⁹.

The consequence is that LBTT is still payable, but at non-residential rates rather than residential ones, and with no ADS on top¹¹. Non-residential LBTT rates and bands differ from residential ones, so the overall bill can be materially different from six separate purchases.

Buyers in this position may also have a choice about how the transaction is taxed. Multiple dwellings relief (MDR) is a partial LBTT relief available when a buyer acquires more than one dwelling in a single transaction or a series of linked transactions¹³, and Revenue Scotland notes that MDR may be available on the purchase of six or more residential properties in one transaction, even though those purchases are relieved from the ADS and treated as non-residential¹⁴. The same option exists elsewhere in the UK: in Wales, a taxpayer buying six or more dwellings in a single transaction may treat it either as a non-residential transaction or as residential with a claim to MDR¹⁵.

Two points of interaction are worth noting. MDR does not displace the ADS¹³, so where a purchase of fewer than six dwellings qualifies for MDR, the ADS can still apply alongside it. And where the ADS is applicable, MDR may be available¹⁴, which affects both the LBTT and, as explained below, how any ADS repayment is calculated. The dedicated page on Multiple Dwellings Relief covers that relief in full.

Paying ADS with your LBTT return within 30 days

The ADS is not a separate bill. You calculate it alongside your LBTT, include it on the LBTT return, and pay it at the same time as your LBTT¹. The legal basis is Schedule 2A to the Land and Buildings Transaction Tax (Scotland) Act 2013⁷.

The deadline is the LBTT deadline: if a transaction is notifiable for LBTT, a return must be made to Revenue Scotland within 30 days of the effective date, and the buyer must calculate and pay any LBTT due, including the ADS, at the same time as submitting the return⁷. In practice your solicitor or conveyancer usually files the return and handles the payment out of the purchase funds, but the legal responsibility sits with the buyer. The page on when the LBTT return must be submitted covers the deadline and what happens if it is missed.

On the online return, the About the Property section asks whether the ADS applies, with yes and no radio buttons; selecting yes populates the About the Additional Dwelling Supplement section on the return summary screen¹⁶. Getting this question right matters, because it determines whether the 8% is calculated and collected at the outset.

One timing rule can remove the need to pay at all. Where the sale of the previous main residence occurs after the effective date of the purchase but before the LBTT return has been made, the ADS does not require to be paid⁷. In other words, if you complete the purchase and then sell your old home before the 30-day return deadline, the supplement never falls due. This is a narrow window, but it is worth knowing if your sale is imminent.

Replacing your main home: reclaiming ADS within 36 months

The main relief from the ADS is for people who are replacing their main home rather than adding to their property holdings. The rules differ by date, and the date that matters is the effective date of the purchase.

For transactions with an effective date on or after 1 April 2024, repayment can be claimed if all of the following are met¹:

• you sell your previous property within 36 months of the date of buying your new one
• the property sold was your only or main residence at any time in the 36 months before you bought the property you paid ADS on
• you have lived in the property you paid ADS on as your only or main residence

For transactions up to and including 31 March 2024, the 36 months is an 18-month period¹. Revenue Scotland's technical guidance sets this out in the same terms: for transactions with an effective date on or after 1 April 2024 the buyer has a 36-month period to dispose of the previous main residence, and for transactions with an effective date up to and including 31 March 2024 the buyer has an 18-month period⁷. The 2023/24 statistics describe the same rule for that year: the payment could be reclaimed if the previous main residence was sold within 18 months, with the claim made within five years of the submission date¹⁷.

The detailed conditions for purchases from 1 April 2024 are that the disposal happens within the period of 36 months beginning with or ending with the effective date of the transaction, that the disposed dwelling was the buyer's only or main residence during the 36 months ending with the effective date, and that the purchased dwelling has been occupied as the buyer's only or main residence. Where two or more buyers each own another dwelling, all buyers must meet the conditions⁷.

Joint buyers and couples get some flexibility. For transactions with an effective date on or after 1 April 2024, only one of the buyers is required to meet the conditions about the previous main residence, but both must meet the condition of occupying the new property as their only or main residence¹. For spouses, civil partners and co-habitants there are special rules under which only one buyer needs to meet the selling condition, but both must meet the residence conditions¹. The narrow page can I get the ADS back if I sell my previous home? answers this scenario directly, and do I pay ADS if I still own a share of my former home? covers the separated-couple position.

The reclaim is a normal part of how the system works, not an exception. Approximately 9% of ADS repayment claims are received within four weeks of the initial tax return being submitted¹⁷.

How to claim an ADS repayment and the evidence you need

There are two routes to a repayment, depending on how much time has passed. The first is to amend the original LBTT return for the transaction, if the claim is within the statutory 12-month amendment period set by section 83(2) of the Revenue Scotland and Tax Powers Act 2014. The second is to claim repayment of an overpayment of tax under section 107 of that Act, within five years of the tax return due date⁷. Revenue Scotland aims to process repayment claims within 10 working days⁸, and the repayment is made with interest⁸, at the higher of 0.5% per annum and the Bank of England Base Rate¹.

The claim itself is made online using Revenue Scotland's ADS repayment claim form. Points to know before starting⁸:

• Paper claims submitted by post can no longer be accepted.
• All fields marked with an asterisk are mandatory, and incomplete forms may be rejected without repayment being made.
• An electronic signature can be provided as a typewritten signature.
• Claims can be made by the taxpayer or via an agent.

Evidence is what decides the claim. Revenue Scotland will consider any documentary evidence supporting it, and the guidance lists what is accepted⁷:

• a copy of the signed disposition of sale
• Land Registration documents
• a letter from your solicitor clearly stating the sale and the date of entry
• a Council Tax bill
• a utilities bill
• a bank statement

The sale evidence and the occupancy evidence do different jobs: the disposition or solicitor's letter proves when the previous home was sold, while the Council Tax, utilities and bank statements help show where you actually lived. If your claim is being made more than 12 months from the filing date of the original return, you will need to provide proof of the sale of the previous property⁸.

One calculation point catches people out. Where a claim for Multiple Dwellings Relief was made as part of the transaction, the amount of ADS reclaimable is the amount paid, based on the average consideration used for the MDR claim⁷. The page on how long an LBTT return can be amended covers the amendment route in more detail.

Where a repayment cannot be claimed

The conditions are strict, and Revenue Scotland's guidance is explicit that there is no discretion. In cases where the repayment conditions are not met, including where a previous main residence is sold outwith the time limit, no repayment may be claimed, and there are no provisions for exceptional circumstances⁷. A delayed sale, a broken chain or a change of plans after the window closes do not reopen it.

The changes to the rules are not retrospective, so particular attention should be given to timescales and repayment conditions, which differ depending on the effective date of the transaction⁴. A buyer whose purchase took effect before 1 April 2024 has the shorter, 18-month window, and cannot benefit from the later extension.

Other dead ends include:

• Not occupying the new property as a main residence. The repayment requires the purchased dwelling to have been occupied as the buyer's only or main residence⁷. A property bought as a buy-to-let does not qualify, whatever happens to the old home.
• Missing the claim deadline. The amendment route closes after 12 months, and the overpayment route closes five years after the return due date⁷.
• Incomplete claims. Forms with mandatory fields left blank may be rejected without repayment being made⁸.

The scale of the charge makes these limits worth taking seriously. Roughly £188 million in gross ADS was declared due in 2021/22, an increase of approximately £35 million (22%) on the previous year⁶. The share of overall forgone revenue from ADS reliefs reached 23% of the total in 2024/25², which shows how much tax the exemptions and repayments take out of the charge's gross yield.

ADS in figures

The supplement is a substantial part of the Scottish property tax landscape. Approximately 25,100 residential LBTT returns received in 2021/22 had ADS declared due, equating to 23% of all residential conveyances that year⁶. City of Edinburgh accounted for 22% of gross ADS declared due in 2021/22 with £41 million, and Glasgow City accounted for the second-largest share, 12% of the total with £22 million⁶.

The percentage of residential claims including ADS has been more stable in recent years, ranging between 17% and 20% over the period covered by the Scottish Government's review of LBTT³. That review also considered the six-or-more dwellings exemption, recommending that the threshold be maintained but reviewed periodically³.

For most readers the practical questions are the ones this page has answered: whether the 8% applies, whether the £40,000 threshold or an exemption removes it, and whether the 36-month reclaim window offers a way back. The related guides to the costs of buying a house, Stamp Duty higher rates on additional properties and when the higher rates do not apply cover the position in the other UK nations.