The Additional Dwelling Supplement in Scotland is an 8% surcharge added to your Land and Buildings Transaction Tax bill when you buy a residential property for £40,000 or more and already own at least one other dwelling anywhere in the world. The 8% applies to the whole purchase price from the first pound, so a £250,000 buy-to-let carries £20,000 in ADS before you even work out the standard LBTT. Revenue Scotland collects it alongside LBTT on the same return.
When You Owe the Supplement
The test runs at the end of the transaction day. If you complete a Scottish residential purchase of £40,000 or more and you still own another dwelling at that point, ADS is triggered. Location of the other property is irrelevant. A flat in London, a holiday home in Spain, or a rental in Edinburgh all count toward your total.
Spouses, civil partners, and cohabitants are treated as a single economic unit. If your partner owns a property, it counts as yours. Children under 16 fall into the same unit as their parents, so putting a title in a child’s name does not sidestep the charge.
Since 1 April 2024, a property you own elsewhere only counts toward your total if the value of your individual share is £40,000 or more. A 25% stake in a jointly owned dwelling worth £120,000 is a £30,000 share and is disregarded. That matters for anyone holding a minor inherited interest in family property.
Companies and other non-individual buyers face stricter treatment. A company purchasing even a single dwelling owes ADS regardless of whether it already holds any residential property, because the legislation treats corporate acquisitions as inherently additional.
How Much It Costs
For any transaction with an effective date on or after 5 December 2024, ADS is 8% of the total purchase price. It is not banded like the main LBTT rates. The full 8% hits the entire consideration.
A second home bought for £200,000 attracts £16,000 in ADS on top of the LBTT due on the same transaction. Both are reported on one return and paid together. There is no separate ADS filing.
Contracts Signed Before the Rate Rise
If your contract was entered into on or before 4 December 2024, the previous 6% rate applies even if settlement happened later. Only contracts signed on or after 5 December 2024 attract 8%.
What Counts as a Dwelling
Revenue Scotland defines a dwelling broadly. Any building or part of a building used or suitable for use as a single home qualifies, as does a property under construction or being converted for residential use. Holiday homes, short-term lets, and part-year properties all count. Where a large house has been split into flats, each flat is its own dwelling.
Two categories sit outside the definition. Cleared sites with no buildings do not count, even with planning permission for housing. Caravans and houseboats are generally not dwellings unless permanently fixed to the land.
Inherited and Gifted Property
Inheriting or being gifted a dwelling does not itself trigger ADS, because those transfers are exempt from LBTT. But the property still counts toward your ownership total when you next buy. Inherit your parents’ house while you already own your own home, and your next Scottish residential purchase will attract the supplement because you own two dwellings at that point.
The £40,000 share rule softens this for small interests. For transactions with an effective date on or after 1 April 2024, an inherited dwelling only counts if the value of your individual share reaches £40,000. A minor fractional interest in a family estate below that threshold is disregarded.
Exemptions and Reliefs
Replacing Your Main Residence
The most common relief covers people moving home. If you sell your only or main residence and buy a replacement, no ADS is due, provided the sale of the old home fell within 36 months before the new purchase. For transactions before 1 April 2024, that window was 18 months. The property being sold must have been your main residence at some point during the look-back period.
If the timing runs the other way and you buy the new home before selling the old one, ADS is payable at completion but can be reclaimed once the sale goes through, as long as it happens within 36 months of the new purchase.
Buying Six or More Dwellings at Once
Purchasing six or more separate dwellings in a single transaction qualifies for 100% ADS relief. The purchase is treated as non-residential for LBTT purposes, so different rates apply and the supplement drops away. This is open to individuals and companies alike.
Other Reliefs
LBTT reliefs for certain transactions by registered social landlords, local authorities, and housebuilders involved in part-exchange arrangements also affect the ADS. Where partial LBTT relief applies, the ADS is reduced in proportion.
Reclaiming ADS After You Sell the Old Home
If you paid the supplement because your previous main residence had not yet sold, you can reclaim it once the sale completes. The old property must be sold within 36 months of the effective date of the new purchase. Miss that window and no repayment is available. There is no provision for exceptional circumstances.
How you claim depends on timing. If the sale happens within 12 months of the filing date of your original LBTT return, you or your agent amend the original return through Revenue Scotland’s online system (SETS). If the 12-month amendment window has closed, you submit a repayment claim under section 107 of the Revenue Scotland and Tax Powers Act 2014, which allows claims for up to five years from the return’s due date. Everything goes through the online portal.
Claims filed more than 12 months after the original return need supporting documents. You must upload proof of sale, such as a copy of the disposition, Land Registration documents, or a solicitor’s letter stating the date of sale. You also need proof you lived in the previous property as your main residence during the look-back period, which can be a Council Tax bill, a utilities bill, or a bank statement.
Filing Late
Because ADS is reported on your LBTT return, missing the filing deadline pulls in the standard LBTT penalties. A £100 charge applies immediately if the return is not received by the submission date. After three months, daily penalties of £10 run for up to 90 days. At six months, another £300 or 5% of any unpaid tax is added, whichever is greater. The same again applies at twelve months.
On a large ADS bill, the percentage-based penalties at six and twelve months can be far heavier than the opening £100. A buyer who owes £20,000 in ADS and files a year late could face well over £2,000 in penalties on top of the tax. Filing on time, even if you plan to claim a repayment later, avoids that entirely.