Scottish property tax revenues have reached a new record, with Land and Buildings Transaction Tax (LBTT) generating £758.9m in the 12 months leading up to August 2026. This figure represents an increase of £82m, or 12.1%, compared to the preceding 12-month period, according to analysis by DJ Alexander.
Residential LBTT, excluding the Additional Dwelling Supplement (ADS), generated £52.3m in August alone, which was the highest August figure on record and 3% above August 2025. The Additional Dwelling Supplement (ADS) contributed £228.1m over the latest 12 months, an increase of £45.8m, or 25.1%, from a year earlier. ADS accounted for approximately 30% of total LBTT receipts.
However, recent monthly figures suggest some cooling in the market, with gross ADS receipts in August reaching £26.4m, a 4% decrease year-on-year. The number of returns declaring ADS also saw a 9% fall to 1,690. The proportion of residential buyers not subject to LBTT has significantly decreased since the tax's introduction, dropping from 52.4% in 2015 to 30.9% by August 2026.
David Alexander, chief executive of DJ Alexander Scotland, warned that elevated transaction costs could eventually impact housing activity. He suggested that buyers might delay or cancel home purchases, and investors could be deterred by the tax regime in Scotland, potentially leading them to transfer assets elsewhere.