If you are buying a property in Scotland you may have to pay ADS, an extra Property Tax. Additional Dwelling Supplement is paid in addition to LBTT.

We are all watching our money, ensuring we budget and tighten our purse strings at the moment. Every penny really counts. If you are looking to move house in Scotland, or buy in Scotland for the first time, ensure you check what property taxes you may have to pay. Here we take a look at the Additional Dwelling Supplement, known as ADS.

ADS is Additional Dwelling Supplement

What is ADS in Scotland?

ADS Tax is payable on purchases of second homes or buy to let properties in Scotland. It is a supplement payment paid in addition to LBTT (formerly know as Stamp Duty).

Why do we pay ADS?

The Scottish Government introduced ADS on the 1st April 2016. This was designed to help protect property purchasing opportunities for Scotland’s first time buyers.

How much do you pay?

From the 1st April 2016 the charge was 4% of the property purchase price. This was then revised in 2022 and any purchase transaction on, or after, the 16 December 2022 with be charged an increased rate of 6%.

Click here to use this great Scottish Government Property Tax calculator

Who pays ADS?

ADS is payable when you purchase a residential property in Scotland, whilst currently owning another property anywhere in the world, not just in the UK. The purchase price of the property has to be £40,000 or above. Below £40,000 you do not pay ADS.

ADS is payable when you buy a new home before selling your current home but will be repaid if you sell your current home within 18 months.

How do you pay ADS?

Your property solicitor will confirm exactly how much LBTT and ADS you will be required to pay. You will pay this to your solicitor, or conveyancer, ahead of the settlement or completion date. Your solicitor will ensure the tax is paid to Revenue Scotland within a 30 day period. If it is not paid within the 30 day period you could be liable for penalties and interest.

How can I avoid paying ADS?

You can void paying Additional Dwelling Supplement (ADS) in Scotland if you sell your main residence and purchase your new main residence on the same day.

You may find these useful:

Property Tax in Scotland. What do I pay and when?

What is a Home Report in Scotland

How to choose an estate agent