Land and Buildings Transaction Tax (LBTT) is a property transaction tax applied to chargeable land transactions in Scotland.  It operates on a progressive basis,
with different rate bands depending on the value of the transaction and the type of property.  A series of LBTT reliefs provides whole or partial relief from the tax.  

Alma Economics was commissioned by the Scottish Government to review various aspects of the LBTT regime to assess whether it meets its intended policy objectives. This review was designed to support decisions in the next Parliament on whether any legislative changes may be required. 

This review focused on five areas of LBTT:

(i) treatment of non-residential and mixed-use property
(ii) multiple Dwellings Relief (MDR)
(iii) 6+ dwellings Additional Dwelling Supplement (ADS) exemption
(iv) first-time buyer relief
(v) alignment with Scotland’s Just Transition and Net Zero goals.

It assessed whether these areas were achieving their intended policy objectives and how they interacted with each other. 

There were three main strands in the project:

(a) comprehensive desk-based review incorporating qualitative, comparative and quantitative assessment
(b) engagement with taxpayers and the property sector through semi-structured interviews and online surveys
(c) synthesis of all evidence gathered to develop policy recommendations in collaboration with a legal expert. 

​The review found that LBTT largely functioned as intended, providing progressive taxation of property transactions while supporting policy objectives through targeted reliefs. Drawing on these findings, Alma Economics developed a set of policy recommendations that balance the inherent trade-offs and tensions involved in pursuing multiple objectives within a single tax framework.

Read the report here