Good news first: there are no immediate changes to Land and Buildings Transaction Tax (LBTT) or the Additional Dwelling Supplement (ADS) until at least April 2027. But that doesn’t mean property owners can relax completely. New Council Tax bands for high-value homes are confirmed for 2028, and there are shifts in income tax and dividend tax that could affect your finances.
Let’s break it all down in plain English so you can plan your next move with confidence.
Table of Contents
- What’s Actually Changing (and When)
- LBTT and ADS: No Changes Until 2027
- Council Tax Revaluation: New Bands for High-Value Homes
- Income Tax Threshold Changes
- What This Means for First-Time Buyers
- What This Means for Home Movers
- What This Means for Buy-to-Let Investors
- What This Means for Sellers
- Actionable Checklists
- Important Disclaimers
- How Top Floor Estate Agents Can Help
What’s Actually Changing (and When)
Here’s a quick-reference table of the key property-related changes:
| Change | Status | When It Takes Effect |
|---|---|---|
| LBTT rates and thresholds | No change | Unchanged until at least April 2027 |
| Additional Dwelling Supplement (ADS) | No change | Unchanged until at least April 2027 |
| Council Tax Bands I & J (homes over £1m) | Confirmed | April 2028 |
| Income Tax thresholds | Confirmed | April 2026 |
| Dividend Tax (+2%) | Confirmed | April 2026 |
| Property Income Tax (+2%) | Confirmed | April 2027 |
| Scottish Child Payment increase | Confirmed | April 2026 (£28.20/week), April 2027 (£40/week) |
Key takeaway: If you’re planning a property transaction in 2026, transaction taxes remain stable. The bigger changes affect high-value homeowners and investors in the medium term.
LBTT and ADS: No Changes Until 2027
For anyone buying property in Scotland, this is the headline you’ve been waiting for.
Land and Buildings Transaction Tax (LBTT) : Scotland’s version of Stamp Duty : remains unchanged. The current thresholds and rates stay in place:
- First-time buyers still benefit from relief on properties up to £175,000
- Standard buyers pay 0% on the first £145,000
- Progressive rates apply above these thresholds
The Additional Dwelling Supplement (ADS) : the extra 6% tax on second homes and buy-to-let purchases : also remains at its current level following last year’s increase. No further rises have been announced until at least April 2027.
What this means for you: If you’ve been holding off on a purchase because you feared a tax hike, the coast is clear for now. But don’t assume this will last forever: ADS has increased several times in recent years, so acting sooner rather than later could save you money.
Useful link: Check your exact LBTT liability using the Revenue Scotland LBTT calculator.
Council Tax Revaluation: New Bands for High-Value Homes
Here’s where things get interesting for owners of higher-value properties.
From April 2028, Scotland will introduce two new Council Tax bands:
| New Band | Property Value | Notes |
|---|---|---|
| Band I | £1 million – £2 million | Individual councils will set rates |
| Band J | Over £2 million | Individual councils will set rates |
Currently, the highest band (Band H) covers all homes valued above £212,000, with annual charges ranging from approximately £3,378 to £4,082 depending on your local authority. The new bands could mean significantly higher annual bills for owners of premium properties.
Important: This is a confirmed change, not a proposal. The exact rates won’t be set until closer to 2028, and each council will determine its own charges.
What this means for you: If you own or are considering purchasing a property valued over £1 million, factor potential Council Tax increases into your long-term costs. For most buyers in the Central Belt, this won’t apply: but it’s worth checking if you’re looking at premium properties in Edinburgh, Glasgow, or surrounding areas.
Income Tax Threshold Changes
While not directly a property tax, changes to income tax affect your overall affordability when buying or investing.
From April 2026:
- Basic rate (20%) threshold rises to £16,538
- Intermediate rate (21%) threshold rises to £29,527
The savings are modest: around £6 to £11 annually for most earners: and much of this is offset by frozen allowances elsewhere (known as “fiscal drag”).
For property investors: Dividend tax will increase by 2% from April 2026, and property income tax rises by 2% from April 2027. If you’re running a buy-to-let portfolio in Scotland, these changes will eat into your margins slightly.
What This Means for First-Time Buyers
Good news: The budget is relatively kind to first-time buyers. LBTT relief remains in place, and there are no new taxes targeting first-time purchases.
Key points:
- LBTT relief threshold stays at £175,000
- No additional charges or supplements
- Scottish Child Payment increases may help families saving for deposits
Our advice: With transaction taxes stable and mortgage rates showing signs of settling, 2026 could be a solid year to make your first purchase. Get a free property valuation to understand what you can afford in today’s market.
What This Means for Home Movers
If you’re selling to buy, the unchanged LBTT thresholds mean your transaction costs remain predictable.
Key points:
- No additional LBTT burden on your next purchase
- Council Tax changes only affect properties over £1m (from 2028)
- Consider timing your sale before any potential future ADS changes
Our advice: The market in the Central Belt remains active. If you’re thinking about upsizing or downsizing, now is a sensible time to explore your options.
What This Means for Buy-to-Let Investors
Property investors face a slightly trickier picture.
Key points:
- ADS remains at 6% on additional properties (no increase announced)
- Dividend tax rises 2% from April 2026
- Property income tax rises 2% from April 2027
- Council Tax increases from 2028 may affect premium rental properties
Our advice: If you’re expanding your buy-to-let portfolio in Scotland, locking in purchases before any future ADS increases makes sense. Run your numbers carefully with the new tax rates factored in, and speak to a financial adviser about structuring your investments efficiently.
What This Means for Sellers
For anyone looking to sell their house in Scotland, the budget is neutral-to-positive.
Key points:
- Buyer affordability remains stable with unchanged LBTT
- No new taxes affecting sellers directly
- Active buyer market in the Central Belt
Our advice: Stable transaction taxes mean buyers aren’t facing unexpected costs, which keeps demand healthy. If you’ve been considering selling, request a free valuation to see where you stand in today’s market.
Actionable Checklists
✅ First-Time Buyers
- Check your LBTT liability using Revenue Scotland’s calculator
- Confirm your mortgage agreement in principle
- Budget for solicitor and survey fees (typically £1,500–£2,500)
- Speak to a financial adviser about Help to Buy or other schemes
✅ Home Movers
- Get a current market valuation on your property
- Calculate your LBTT on the new property
- Consider timing to avoid chain delays
- Review your mortgage options before committing
✅ Buy-to-Let Investors
- Factor 6% ADS into your purchase budget
- Model rental yields with 2027 property income tax increase
- Review your portfolio structure with a tax adviser
- Consider purchasing before any future ADS changes
✅ Sellers
- Request a free, no-obligation valuation
- Review recent sales in your area
- Prepare your property for viewings
- Choose an estate agent with transparent fees
Important Disclaimers
This blog post provides general information only and should not be taken as financial, tax, or legal advice. Tax rules and thresholds can change, and individual circumstances vary.
We strongly recommend:
- Speaking to a qualified solicitor for legal matters
- Consulting a financial adviser for tax and investment planning
- Checking official sources for the most up-to-date information
Official sources:
How Top Floor Estate Agents Can Help
Whether you’re buying your first home, selling to move, or expanding your investment portfolio, Top Floor Estate Agents is here to help you navigate the Scottish property market.
Why work with us?
- Independent, local estate agents covering the Central Belt
- Transparent fees with no hidden costs
- No sale, no fee : you only pay when we deliver
- Free property valuations to help you understand your true market value
- Expert support with negotiation and coordination throughout your sale
Ready to take the next step?
👉 Request your free property valuation today and let’s talk about your property goals.