Scotland's Land and Buildings Transaction Tax gives first-time buyers a discount worth, at most, £600 — and that ceiling is reached the moment a purchase crosses £175,000. Buy at £175,000 or at £1,000,000, the cash saving is identical. Compare that with the tax on a second home or buy-to-let in Scotland, which keeps climbing in a straight line at 8% of the purchase price with no ceiling at all. Running both through the same income-ladder arithmetic shows two very differently shaped curves sitting side by side in the same tax system.
A relief that tops out at £600 and stays there
Revenue Scotland's first-time buyer relief works by raising the nil-rate band of LBTT from £145,000 to £175,000 (Revenue Scotland, 2026). Because the standard rate on that £30,000 slice is 2%, the maximum the relief is ever worth is £600 — and once the mover-rate tax on that band reaches £600 (which happens at exactly £175,000), there is nothing left for the relief to reduce. Running the standard LBTT schedule against the first-time buyer schedule across a price ladder:
| Purchase price | Standard LBTT (mover) | First-time buyer LBTT | Relief saves |
|---|---|---|---|
| £150,000 | £100 | £0 | £100 |
| £175,000 | £600 | £0 | £600 |
| £250,000 | £2,100 | £1,500 | £600 |
| £350,000 | £8,350 | £7,750 | £600 |
| £500,000 | £23,350 | £22,750 | £600 |
| £750,000 | £48,350 | £47,750 | £600 |
| £1,000,000 | £78,350 | £77,750 | £600 |
Below £175,000 the saving still climbs with the price, maxing out exactly where the widened nil-rate band runs out. From £175,000 upward, the saving is frozen at £600 — a buyer at £1,000,000 gets precisely the same cash relief as one at £175,000, because the relief only ever touches that first £30,000 slice of the price, however large the rest of the purchase gets.
The second-home surcharge has no equivalent ceiling
Scotland's Additional Dwelling Supplement (ADS) applies to anyone buying an additional residential property — a second home, holiday let or buy-to-let — on top of the standard LBTT bands. Since 5 December 2024 it has been set at a flat 8% of the whole purchase price, with no upper limit (Revenue Scotland, 2026). Testing it against the same price ladder:
| Purchase price | Standard LBTT | LBTT with ADS | ADS amount | ADS as % of price |
|---|---|---|---|---|
| £150,000 | £100 | £12,100 | £12,000 | 8.0% |
| £250,000 | £2,100 | £22,100 | £20,000 | 8.0% |
| £350,000 | £8,350 | £36,350 | £28,000 | 8.0% |
| £500,000 | £23,350 | £63,350 | £40,000 | 8.0% |
| £750,000 | £48,350 | £108,350 | £60,000 | 8.0% |
| £1,000,000 | £78,350 | £158,350 | £80,000 | 8.0% |
The ADS column is, by construction, exactly 8% of the purchase price at every row — it applies from the first pound, with no nil-rate band of its own and no cap. That is the mirror image of the first-time buyer relief above: one benefit is capped at a flat £600 regardless of price, the other cost is uncapped and scales in a straight line with price. We found the same shape split between England's capped relief and uncapped surcharge; Scotland runs an even starker version of it, because its surcharge rate (8%) is higher than England's (5%) and its relief ceiling (£600) is far smaller than England's (£5,000).
What income it takes to reach each price point
Most UK lenders size a mortgage at around 4.5 times household income, a convention that traces back to the Bank of England's loan-to-income lending framework (Bank of England, 2026). Combined with a deposit, that gives income needed = price × (1 − deposit %) ÷ 4.5 — the same formula behind our income ladder for England's additional-property surcharge. Applying it alongside the Scottish figures above:
| Price | Income needed (10% deposit) | Income needed (25% deposit) | FTB relief saves | ADS surcharge adds |
|---|---|---|---|---|
| £150,000 | £30,000 | £25,000 | £100 | £12,000 |
| £175,000 | £35,000 | £29,167 | £600 | £14,000 |
| £250,000 | £50,000 | £41,667 | £600 | £20,000 |
| £350,000 | £70,000 | £58,333 | £600 | £28,000 |
| £500,000 | £100,000 | £83,333 | £600 | £40,000 |
| £750,000 | £150,000 | £125,000 | £600 | £60,000 |
| £1,000,000 | £200,000 | £166,667 | £600 | £80,000 |
The income bar and the ADS surcharge rise together in lockstep — double the price and both roughly double. The first-time buyer relief does nothing of the sort: the income needed to buy at £1,000,000 is more than five times the income needed at £175,000, but the relief attached to that purchase hasn't grown by a single pound.
Why the two are shaped so differently
The relief and the surcharge are built on different mechanics. First-time buyer relief works by widening a nil-rate band — a fixed-size tax-free slice at the bottom of the price, which is why its cash value is capped the moment that slice is fully used up. The Additional Dwelling Supplement is a flat percentage surcharge layered on top of the standard rates from the first pound of the price, with nothing to cap it. As a share of the purchase price, the £600 relief actually shrinks continuously as price rises — 0.34% of a £175,000 purchase, 0.06% of a £1,000,000 one — even though the cash figure never moves. The ADS stays at a constant 8% of price throughout, which is a far larger and far more stable cost in both cash and percentage terms than the relief is ever worth as a saving.
What this comparison doesn't show
None of this is a comment on whether buying a first home or a second property in Scotland is the right decision at any given price — that depends on personal finances, rental yield for a buy-to-let, and a buyer's own circumstances, not on the LBTT bill in isolation. The 4.5-times-income figure is a common lending rule of thumb, not an actual affordability assessment, which also depends on a lender's own income multiple, credit history, existing debt and (for a buy-to-let mortgage) rental income treatment. Speak to a qualified mortgage adviser and a solicitor before acting on any of the figures above.
Check your own numbers
Run a specific Scottish purchase through the stamp duty and LBTT calculator, including with the additional-property surcharge applied. Homecost's Land Registry-sourced true-cost tool does not yet cover Scottish sales directly, but you can see the same mortgage, council tax and tax breakdown in action for a comparable English property — try a postcode such as M1 1AE in Manchester. For how Scotland's LBTT compares with England's SDLT and Wales's LTT side by side, see our full three-regime comparison, or browse more Cost Intelligence guides.
Based on the live Homecost stamp duty and LBTT calculator against Revenue Scotland's 2026 rate tables, cross-checked against Revenue Scotland's published guidance, and the Bank of England's loan-to-income lending convention, fetched 15 October 2026. See how we source our data.