Scotland residential LBTT revenue hits record ~£760m in 2025/26, Rettie finds

By Scott Craig

Residential Land and Buildings Transaction Tax (LBTT) revenue in Scotland reached a record of about £760 million in 2025/26, up roughly 13% on the previous year, according to Rettie’s annual LBTT briefing.

The research attributes the rise to slightly higher transaction volumes and climbing prices. It notes that when LBTT began in 2015, just over half of transactions cleared the residential threshold. Now about seven in ten Scottish house sales cleared the £145,000 residential threshold where LBTT is due. A record proportion.

Edinburgh remains the largest geographic contributor (about £95 million), ahead of Glasgow (about £62.5 million). Sales above £250,000 were responsible roughly 95% of residential LBTT receipts. Sales of properties over £750,000 contributed around 22% of the tax take, despite being only about 1% of transactions.

The additional dwelling supplement (ADS) that is charged on additional dwellings such as second homes and buy-to-let now makes up about 33% of residential LBTT revenue, up from around 27% in mid-2025 after the rate rose from 6% to 8% in December 2024.

Rettie’s Dr John Boyle, who leads research and strategy, said residential LBTT is “pushing towards £800 million per year” and still leans on particular local markets, especially Edinburgh, plus that thin slice of sales above £750,000. He urged behavioural analysis of how LBTT shapes buying decisions.

Eligible first-time buyers can claim first-time buyer relief that increases the residential nil-rate band from £145,000 to £175,000 (a reduction of up to £600). But fiscal drag means more first time buyers may be facing LBTT than ever before.

Sources

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
>