So then, how does this affect buy-to-let investors purchasing a Scottish rental property?
Much like in England, Wales and Northern Ireland, if you’re purchasing a property in Scotland for buy-to-let purposes, it’s essential to understand that you’ll likely be paying a higher Land and Buildings Transaction Tax rate.
The additional dwelling tax rate will apply if the property is worth more than £40,000. If it isn’t, you’re off the hook. But as the average UK property price now stands at over £292,000, it’s unlikely that you’ll find a buy-to-let property as cheap as this.
For additional properties in Scotland worth up to £145,000, owners must pay 6% on the purchase price. Following this, the subsequent tax rates are 8% on properties worth £145,001 to £250,000, 11% on those priced between £250,001 and £325,000, 16% for those between £325,001 and £750,000, and finally, 18% for anything over £750,000.
We’ve included the following table to refer to any time you’re wondering how much stamp duty you must pay on a Scottish property if it’s an additional dwelling or a buy-to-let purchase.
| Purchase Price | Additional Dwelling Rate |
|---|---|
| Less than £145k | 6% |
| £145k to £250k | 8% |
| £250k to £325k | 11% |
| £325 to £750k | 16% |
| Rest over £750k | 18% |
However, it’s important to remember that these rates will change. To ensure you’re current on the latest Land and Buildings Transaction Tax rates, we recommend referring to the official Scottish government website, which will be updated accordingly.
Learn More: Want to know the best property to invest in or how to get into UK real estate? Whether buying property as a company or going solo, our expansive beginner investment guides offer everything you need to know before starting!
