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The Scottish Government has launched a call for evidence ‘The Land and Buildings Transaction Tax Additional Dwelling Supplement’ which seeks views on the operation of the Additional Dwelling Supplement (ADS).

At a glance

The Additional Dwelling Supplement (ADS) was introduced for Scottish Land and Buildings Transaction Tax (LBTT) purposes from 1 April 2016.

The ADS generally applies where a buyer, who is not replacing their main residence, purchases a property which results in them owning more than one residential property. The ADS charges an additional 4% of LBTT where the chargeable consideration is £40,000 or more.

Call for evidence

This call for evidence was announced at the 2022-23 Scottish Budget and is the first step in a review of the ADS. It aims to:

Responses should be submitted online or via post no later than 11 March 2022.

Useful guides on this topic

Scottish Budget 2022-23: Summary
Scottish Finance Secretary Kate Forbes announced the draft Scottish Budget for 2022-23 on 9 December 2021. 

LBTT: Additional Dwelling Supplement
What is the Additional Dwelling Supplement for the Land and Buildings Transaction Tax? When does it apply? 

LBTT: Land and Buildings Transaction Tax (LBTT)
What is Land and Buildings Transaction Tax (LBTT)? What are the rules?

External link

Land and Buildings Transaction Tax - Additional Dwelling Supplement: call for evidence and views

Call for evidence questions

Timelines for the ADS

Time taken to purchase a new main residence: 18-month window

1) Should the Scottish Government consider amending the length of time available to purchase a new main residence following the sale of a previous main residence from 18 months?

2)  If so, can you provide further explanation and/or evidence regarding the circumstances in which 18 months may not be appropriate?

3) If the Scottish Government were to amend the length of time available to purchase a new main residence, what period of time should be considered and why?

Disposal of a previous main residence: 18-month window

4) Should the Scottish Government consider amending the length of time in which a previous main residence can be sold in order for a repayment of the ADS to be claimed?

5) If so, can you provide further explanation and/or evidence where 18 months may not be appropriate?

6) If the Scottish Government were to amend the length of time available to dispose of the ownership of a main residence, what period of periods of time should be considered and why?

Specific scenarios

Inherited property

7) What circumstances and issues should the Scottish Government take into account in considering the treatment of low-value interests in inherited properties for the purposes of LBTT?

8) Should the Scottish Government consider the introduction of a grace period along the lines of that in place for SDLT in respect of inherited property? If so, what arrangements should be considered?

Divorce or separation

9) What circumstances and issues should the Scottish Government take into account in considering the tax treatment of a new property purchased following a divorce or separation, and why?

10) Do you have views on the case for a more specific legislative amendment along the lines of that available in SDLT? If so, please provide further details.

11) Separately, would increasing the length of time available to dispose of a main residence (see A2) assist in situations of divorce or separation?

Joint buyers/economic unit provisions

12) Are there other issues of concern regarding the treatment of joint buyers which the Scottish Government should consider? If so, can you provide further explanation and evidence regarding these?

13) Do you have any proposals as to how the legislation might be amended in response to these scenarios, in a way that would ensure consistency with the application of the ADS for an individual buyer?

Transactions involving housing providers

Transactions involving local authorities: affordable housing

14) What circumstances and issues should the Scottish Government consider in assessing the case for a broader relief for local authorities where properties are acquired for affordable housing purposes, and why?

Housing Co-operatives and other approaches

15) Are there grounds for the Scottish Government to consider the introduction of a relief from the ADS for housing co-operatives, or any other approaches intended to deliver housing which is affordable? Please provide further explanation and evidence regarding this.

Exceptional circumstances

16) Is there a case for the Scottish Government to consider legislating for an exceptional circumstances provision along the lines discussed above?

17) If so, what circumstances should be considered, and on what grounds?

Additional questions

18) Is there any other issue regarding the operation of the ADS legislation which you would wish the Scottish Government to consider as part of the overall review? If so, please provide explanation and commentary on any available evidence about this.

19) Are there any other points you would wish to raise regarding the operation of the ADS in different parts of Scotland?

20) The Scottish Government has a duty:

Are there any issues relevant to the content of this consultation that you believe the Scottish Government should consider in order to assure performance of these duties?


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