Land & Building Transaction Tax (LBTT) Calculator

What is the LBTT?

Land and Buildings Transaction Tax (LBTT), introduced on 1 April 2015, is a tax levied on property transactions in Scotland. LBTT replaced the UK Stamp Duty Land Tax (SDLT) for Scottish properties. For residential properties, LBTT is charged on properties with a value over the threshold of £145,000. Above this amount, increasing tax rates apply to different portions of the property value, with higher rates for more expensive properties.

How Is MDR Applied on LBTT?

Multiple Dwelling Relief (MDR) is rooted in the principle of preventing disproportionate taxation that would arise from treating the purchase of multiple dwellings as a single, large-value transaction. Because LBTT is charged on a slab basis, without MDR, buyers engaging in such transactions would face significantly higher LBTT rates than those purchasing individual properties. 

For the purposes of MDR, a “relevant transaction” is a transaction that involves the purchase or acquisition of two or more dwellings in a single transaction or as part of a series of linked transactions. Particularly:

• Single Transaction: This includes the purchase of multiple dwellings in one transaction, such as buying a block of flats or multiple houses together.
• Linked Transactions: These are separate transactions that are connected in some way, such as being part of the same arrangement or agreement, even if they occur at different times.
• Dwellings: The purchase of each property involved must qualify as a separate dwelling, meaning they must be distinct residential units suitable for use as individual homes.

Therefore, for MDR to apply, the transaction must meet the criteria for being a relevant transaction, and the relief is designed to reduce the overall LBTT liability by calculating the tax based on the average value of the dwellings rather than the total purchase price.

For more information you can visit our complete guide on Land and Buildings Transaction Taxes.