Many landlords and property investors are continuing to buy properties in Scotland.

The recent Scottish Budget in December saw tax charged from ADS rise to 8% on the sale of an additional residential property. However, even though the Land and Buildings Transaction Tax (LBTT) and ADS are considerably higher in Scotland many landlords and property investors are continuing to buy properties.  

Often overlooked by many that property investors and landlords in Scotland can receive multiple dwellings relief (MDR) on most transactions that involve the purchase of more than one dwelling in a single transaction or in a series of linked transactions. This relief ensures that the buyer does not pay LBTT at a higher rate than if bought separately and lower rate bands would have applied. MDR is a partial relief from LBTT. The relief ensures that in all cases a minimum prescribed amount of tax is charged on transactions involving multiple dwellings.  

MDR is available on most transactions that include multiple residential dwellings whether or not there is also non-residential property in one or more of the transactions. Both multiple dwellings relief and the Additional Dwelling Supplement (ADS) relate to transactions with dwellings and additional property that is not classed as a dwelling (i.e. investment properties for the private rental sector).

Where the ADS is applicable, MDR may be available. MDR may also be available on the purchase of six or more residential properties bought in a single transaction even though these are not subject to the ADS and are treated as being non-residential.  

Contact us to find out about further investment opportunities, or visit our Investment Centre.