The new 3% supplement on LBTT that applies from 1 April 2016, is said to principally affect purchases of second homes and buy-to-let properties, but it was less obvious, when the supplement was announced, that individuals merely replacing their main residence might also have to pay this additional amount, depending on the timing of the dates of entry.

The supplement applies where the purchase of a dwelling results in the buyer owning more than one dwelling at the end of the day on the date when that purchase settles.

Where the buyer is an individual, purchasing a dwelling that is to be their main residence, then regardless of how many properties they own on the day of settlement, they will not be liable for the supplement, provided they have sold a previous main residence within 18 months prior to the purchase.

Conversely, even if the buyer is just replacing their main residence, and does not own any other dwellings, they will still have to pay the supplement on the purchase price of the property, if the sale of their original main residence has still to complete – even if that is a difference of only a few days. In that case, the buyer can apply for a repayment of the supplement when the sale of their previous main residence finally settles, provided that happens not later than 18 months from the date of the purchase.

Timing will be crucial in these situations, as funds will have to be available for the supplement even though it may subsequently be recouped. Options open to purchasers in these situations may be to take out a short term loan, or try to complete the sale before the purchase: it may prove cheaper to stay in a hotel for a few days instead of having to budget for the additional tax.

Detailed guidance from Revenue Scotland is available on their website at: