How is LBTT calculated per dwelling under multiple dwellings relief?

Under Schedule 5 paragraph 13, you total the consideration attributable to all dwellings, divide by the number of dwellings to find an average price, then calculate LBTT on that average as if it were a standalone residential transaction. This per-dwelling approach typically produces a lower overall tax charge than applying rates to the aggregate price.

How do linked transactions affect the LBTT multiple dwellings relief calculation?

If the transaction is one of several linked transactions, you must add together the consideration attributable to dwellings across all relevant linked transactions. You then divide this combined total by the total number of dwellings involved to arrive at the average price per dwelling used for calculating the tax.

How does the Additional Dwelling Supplement apply under multiple dwellings relief?

Where the Additional Dwelling Supplement under Schedule 2A applies, the tax calculation at Step 3 must be carried out separately for each individual dwelling. Any available ADS relief, such as the exemption for purchases of six or more dwellings in a single transaction, must be taken into account on a dwelling-by-dwelling basis.

Can you give an example of the LBTT multiple dwellings relief calculation?

If a buyer purchases four flats for £600,000 total, the average price per dwelling is £150,000. LBTT on £150,000 using standard residential rates is £100 per dwelling (0% on the first £145,000 plus 2% on £5,000). Total LBTT is £400, significantly less than if standard rates applied to the full £600,000.

Land and Buildings Transaction Tax (Scotland) Act 2013 section Schedule 5 paragraph 13

Calculating the tax due in relation to a dwelling

Section Schedule 5 paragraph 13 sets out the step-by-step method for calculating the amount of LBTT due in relation to each individual dwelling when the multiple dwellings relief applies.

Step 1: Add up the total consideration attributable to all dwellings involved in the transaction (or across all linked transactions if applicable).
Step 2: Divide that total consideration by the total number of dwellings to arrive at an average price per dwelling.
Step 3: Calculate the tax as if the average price per dwelling were the chargeable consideration for a standalone residential property transaction (not linked to any other).
Step 4: Where the Additional Dwelling Supplement (ADS) under Schedule 2A applies, repeat Step 3 for each individual dwelling, taking into account any available ADS relief (such as the exemption for purchases of six or more dwellings).

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