Changes to Additional Dwelling Supplement

The following changes around ADS are subject to parliamentary approval and are expected to take effect from the 1st of April 2024.

Changes to the LBTT additional dwelling supplement (ADS) rules and how they may impact you

The Scottish Government has published a draft Scottish Statutory Instrument to amend the Land and Buildings Transaction Tax (LBTT). The changes to legislation, including various amendments to the additional dwelling supplement (ADS), are due to take effect from 1 April 2024 for purchases with an effective date thereafter, subject to parliamentary approval.

With the ADS surcharge currently 6% of the whole purchase price, the changes to timings and exemptions are likely to affect a decision involving buying an additional property.

The key changes include:

1. Timeframe: The new rules extend the 18-month time limit to 36 months, within which the disposal of a previous main residence must occur to allow for the repayment of ADS. This time extension will bring Scotland in line with the rest of the UK.


2. Divorce or Separation: An improvement to the position of separated spouses and civil partners, allowing in rather limited circumstances a partner who has left but still owns a share in the previous home to purchase a new home without ADS being charged. Cohabitants are not able to claim this relief, even where children reside at the property. For example, if a cohabitee leaves the house, they could still be liable to pay ADS on another purchase.


3. Inherited property: A very limited exclusion of inherited properties when considering whether more than one dwelling is owned at the time of purchase.


4. Small value dwellings: The extension of the exclusion to apply to a dwelling with a value less than £40,000, so that the threshold applies where a share of a property is owned rather than applying to the total value of the property.


5. Local authorities: A new relief for local authorities acquiring residential property for affordable housing.


6. Joint buyers: A comprehensive change in the rules which apply to joint owners acquiring and disposing of dwellings. The relief is extended if either of them disposes of their only or main residence, or where only one of them had an interest in the former main residence.

If you would like to know more?

Contact our legal team who will be happy to discuss the new rules and how they could affect you.



If you have already been dealing with someone at the firm and have a query, please e-mail them first of all. E-mail addresses are found on our Team page.


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