If you’re planning to purchase an additional property in Scotland, there’s a significant update you need to know about. The Scottish Government has announced that the Additional Dwelling Supplement (ADS) will increase from 6% to 8%, starting from 5 December 2024. This change impacts buyers purchasing second homes or buy-to-let properties and is part of broader efforts to manage the housing market.
What is ADS?
ADS is an additional tax applied on top of Land and Buildings Transaction Tax (LBTT) when purchasing an additional property. This applies to homes, second homes, and buy-to-let properties.
Key Details About the Increase:
- Old Rate: 6%
- New Rate (Effective 5 December 2024): 8%
- Who It Affects: Anyone buying an additional property in Scotland that isn’t their main residence.
Exemptions:
If legal missives have been signed on or before 4 December 2024, the current rate of 6% will still apply to your transaction. This provides a crucial window for buyers already in the process of purchasing a property to avoid the higher tax rate.
Why the Change?
The increase reflects government efforts to ensure fairness in the housing market and to generate additional revenue for public services. It also seeks to support first-time buyers by discouraging speculative purchases.
What Should You Do?
For tailored advice on navigating this change, feel free to get in touch with us. Whether you’re buying your first investment property or expanding your portfolio, we’re here to help.
If you would like to discuss this further, please get in touch with our Property Team.
DISCLAIMER
The content of this page is for information only. It is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Gibson Kerr Ltd accepts no responsibility for the content of any third party website to which this webpage refers. Gibson Kerr Ltd is regulated by the Law Society of Scotland.