Scotland
The Additional Dwelling Supplement (ADS)
Scotland’s charge on second homes is not a higher set of bands but a flat percentage of the price, and it reaches further than most buyers expect.
Checked by Radif Partners · Editorial policy · How we calculate
The Additional Dwelling Supplement is 8% of the whole purchase price, paid on top of Land and Buildings Transaction Tax, when a buyer of a home in Scotland will own two or more dwellings at the end of the day and is not replacing a main residence. It applies from a price of £40,000, so a £200,000 flat bought to let costs £16,000 of supplement plus £1,100 of LBTT, £17,100 in all. The rate rose from 6% for transactions with an effective date on or after 5 December 2024, unless the contract was concluded before that date. Spouses, civil partners and cohabitants, with children under 16, count as one economic unit. Since 1 April 2024, a share in a dwelling worth less than £40,000 is ignored. Companies pay the supplement on every dwelling, even the first. A buyer who sold their previous main home within the 36 months before the purchase does not pay it, and one who sells within 36 months after can claim it back.
Additional Dwelling Supplement on your purchase
ADS due
£14,400
| LBTT on the bands | £700 |
| Total to Revenue Scotland | £15,100 |
| Repayable if a former main home sells within 36 months | £14,400 |
Additional Dwelling Supplement: 8% of the whole price on top of LBTT
A flat percentage, from the first pound
The supplement does not work like the LBTT bands. There is no nil band and there are no slices: once the price reaches £40,000, the whole of it is multiplied by 8%. A £150,000 flat therefore pays £12,000 of supplement while its LBTT is only £100. On cheaper property the supplement is often many times the tax it is added to.
| Price | LBTT | ADS | Total in Scotland | England, higher rates | Wales, higher rates |
|---|---|---|---|---|---|
| £60,000 | £0 | £4,800 | £4,800 | £3,000 | £3,000 |
| £120,000 | £0 | £9,600 | £9,600 | £6,000 | £6,000 |
| £200,000 | £1,100 | £16,000 | £17,100 | £11,500 | £10,700 |
| £300,000 | £4,600 | £24,000 | £28,600 | £20,000 | £19,950 |
| £450,000 | £18,350 | £36,000 | £54,350 | £35,000 | £36,200 |
| £700,000 | £43,350 | £56,000 | £99,350 | £60,000 | £67,450 |
The comparison shows where Scotland stands. At the bottom of the market the Scottish total is the heaviest of the three, because the supplement charges the full price while the English and Welsh surcharges start from bands. On expensive homes the gap narrows, as English and Welsh higher bands climb. A landlord comparing a £120,000 flat in Dundee with one in Middlesbrough is comparing £9,600 with £6,000.
From 2016 to 8%: how the rate has risen
The supplement was introduced on 1 April 2016, a year after LBTT replaced SDLT in Scotland, and has been raised three times since: on 25 January 2019, on 16 December 2022, when it reached 6%, and on 5 December 2024, when it reached the current 8%. Each rise applied from its date to transactions with an effective date on or after it.
The last change carries a transitional rule that still matters for slow purchases. If the contract was entered into before 5 December 2024, the old 6% applies even when entry happens later, so the date the missives were concluded is worth checking. On a £400,000 property the difference is £8,000.
Who is the buyer? The economic unit
The supplement is decided by looking at what the buyers own at the end of the day of the purchase, and Scotland looks further than the names on the title. Spouses, civil partners and cohabitants living together as if married are treated as one unit with their children under 16. A dwelling owned by any of them counts as owned by the buyer. A married man buying a flat in his own name pays the supplement if his wife owns a cottage in Fife, even if he never set foot in it.
The same logic catches parents: a flat bought in the name of a child under 16, or held for them, counts as the parents’ property. An older child is a separate person, so a parent who buys a flat for a student daughter of nineteen in the daughter’s own name does not add a dwelling to the parent’s count. If the parent buys it in their own name, though, the supplement is due.
Joint buyers who are not a couple
Where several people buy together, the supplement applies to the whole price if any one of them meets the conditions. Two friends buying a flat, one of whom already owns a home, pay 8% on the full price, not on half of it.
Shares worth less than £40,000
Since 1 April 2024 an interest in a dwelling worth less than £40,000 is left out of the count. A quarter share of a £140,000 cottage inherited with three siblings, worth £35,000, no longer makes a later home purchase an additional one. Before that date, any share counted, however small. Inherited property is otherwise counted like any other, with one relief since 1 April 2024 for a dwelling inherited between the contract and the date of entry.
Companies pay on every dwelling
A company, or any other buyer that is not an individual, has no home to replace. The supplement therefore applies to every dwelling it buys from £40,000, the first included, and it can never be repaid because no main residence is ever sold. Investors weighing a limited company for buy-to-let in Scotland start with a cost of 8% of every price.
Replacing your home: the 36-month windows
The supplement is not aimed at people moving house, and two windows protect them. If the buyer’s previous main residence was sold in the 36 months before the new purchase, and the new home becomes the main residence, there is no supplement. If the new home is bought first, the supplement must be paid, and it can be reclaimed once the old home is sold, provided the sale happens within 36 months of the purchase. Before 1 April 2024 the backward window was shorter. The ADS repayment guide covers the conditions, the deadlines and the evidence.
The windows only cover a main residence. Someone who owns a flat they let out and a house they live in, and sells the flat to buy a new home, has not replaced anything: the house they keep is the dwelling that triggers the supplement. Wales has a comparable system with its own table of higher rates, and England adds 5% to each band.
One return, one payment
The supplement is not a separate tax with its own form. It is declared on the same LBTT return as the main tax and paid with it, within 30 days of the effective date. The return asks whether the buyer will own more than one dwelling at the end of that day and whether a main residence is being replaced, and the answers decide the figure. A mistake in either direction is corrected by amending the return.
The test is taken at the end of the day of entry, so the order of events on that day matters. A seller who completes the sale of their old home in the morning and takes entry to the new one in the afternoon owns one dwelling at the end of the day and pays no supplement. If the sale slips to the following week, the supplement of £30,400 on a £380,000 house is due, and is only recovered later through a repayment claim.