Does Scottish ADS apply if you sold your main home, later bought a buy-to-let, and now want to buy a new home with your spouse?

Introduction

This is a common Land and Buildings Transaction Tax (LBTT) question in Scotland. A buyer may have sold a former main residence, then bought or kept another property such as a buy-to-let, and later want to buy a new home to live in. The concern is whether the Additional Dwelling Supplement (ADS) applies because, at the end of the new purchase, the buyer still owns more than one dwelling.

The issue has become more important since the rules changed from 1 April 2024. The old timing rules were tighter. The newer rules are more flexible, but joint purchases with a spouse or civil partner can still cause confusion.

The Question

The scenario can be stated in general terms like this:

• A buyer sold a former only or main residence in 2022.
• At the time of that sale, the buyer did not own another dwelling.
• After that sale, the buyer bought a separate property as a buy-to-let investment.
• The buyer then lived elsewhere, rather than in the buy-to-let.
• Within 36 months of selling the former main residence, the buyer and their spouse plan to buy a new dwelling together and occupy it as their only or main residence.
• At the end of the effective date of that new purchase, the buyer will still own the buy-to-let.
• The spouse does not own, and has never owned, any dwelling.

The main questions are:

1. Does it matter that the buy-to-let was bought after the old main residence was sold?
2. Do all transactions have to take place after 1 April 2024, or is it enough that the new purchase completes on or after that date?
3. Does buying jointly with a spouse change the ADS position?

Nick’s Explanation

Nick’s view was that ADS should not apply on these facts.

In anonymised form, his reasoning was:

“ADS should not apply to the purchase of the new home in this case, based on Schedule 2A, paragraph 2(2) of the Land and Buildings Transaction Tax (Scotland) Act 2013, as amended from 1 April 2024.”

He identified the key replacement conditions in paragraph 2(2):

• the buyer disposed of a dwelling in the 36 months ending with the effective date of the new transaction;
• that dwelling was the buyer’s only or main residence at some point in that 36-month period; and
• on the effective date, the buyer intends to occupy the new dwelling as their only or main residence.

He also explained that the 2024 change removed the old requirement for the disposal to be immediately before the new purchase. On that basis, an intervening purchase of a buy-to-let does not by itself prevent replacement treatment.

On the joint purchase point, Nick referred to the special spouse and civil partner rules and concluded that where one spouse has sold a previous main residence within the 36-month period, and both intend to occupy the new dwelling as their main home, ADS should not apply even if the other spouse has not owned a previous residence.

The Law

The relevant legislation is Schedule 2A to the Land and Buildings Transaction Tax (Scotland) Act 2013.

Broadly, ADS applies to certain purchases of dwellings where, at the end of the effective date, the buyer owns more than one dwelling and is not replacing an only or main residence.

The key provisions are these:

• Schedule 2A, paragraph 2 sets out when the schedule applies.
• Paragraph 2(2), as amended for transactions with an effective date on or after 1 April 2024, sets out when a buyer is treated as replacing an only or main residence.
• Paragraph 5 contains rules for joint buyers.
• Paragraph 9A contains relief for spouses, civil partners and cohabitants replacing a main residence.

The legislative amendment extending the replacement window to 36 months was made by the relevant 2024 Scottish statutory instrument, commonly referred to in practice as SSI 2024/104.

Revenue Scotland’s published guidance at LBTT10020 also gives examples of how the replacement test works after 1 April 2024, including an example where a buyer sells a former main residence, lives elsewhere, still owns another dwelling, and later buys a new main residence without ADS applying.

Analysis

The cleanest way to analyse this is to work through the rules in order.

First, does the new purchase fall within the basic ADS conditions?

If a person buys a dwelling and, at the end of the effective date, they own more than one dwelling, ADS may apply. In this scenario, that starting point is met because the buyer will own the buy-to-let and the new home.

Second, is the buyer replacing a main residence under paragraph 2(2)?

For transactions with an effective date on or after 1 April 2024, the replacement test is materially wider than before. The buyer can qualify if:

• they disposed of a dwelling within the previous 36 months;
• that dwelling was their only or main residence at some time during that 36-month period; and
• they intend the new purchase to be their only or main residence.

On the stated facts, those conditions are met by the buyer who sold the former home:

• the former home was sold within 36 months before the planned purchase;
• it was that buyer’s main residence; and
• the new property is intended to be the couple’s new main residence.

Third, does it matter that the buy-to-let was bought after the former main residence was sold?

On the post-1 April 2024 wording, that should not matter. The legislation now focuses on whether there was a disposal of a former main residence within the 36-month period and whether the new dwelling is intended to be the new main residence. It no longer requires the old main residence sale to be immediately before the new purchase, and it does not say that the buyer must already have owned the retained additional dwelling at the time of the earlier sale.

So, the intervening purchase of a buy-to-let does not, on its own, block replacement treatment.

Fourth, do the earlier transactions also need to have taken place after 1 April 2024?

Generally, no. The important date is the effective date of the new acquisition being tested for ADS. If that effective date is on or after 1 April 2024, the amended 36-month replacement rule is the relevant rule for that new transaction. The earlier sale of the former main residence can have taken place before 1 April 2024, provided it falls within the 36-month look-back period ending with the effective date of the new purchase.

Fifth, what is the effect of a joint purchase with a spouse?

This is the point that often causes most difficulty. Joint buyer rules can potentially bring ADS into point where one buyer would not have been liable alone. However, the legislation also contains spouse and civil partner relief designed to prevent unfair outcomes where a couple are replacing a home together.

On the facts given:

• one spouse sold a previous main residence within the relevant 36-month period;
• that property was that spouse’s main residence during that period;
• the other spouse owns no dwelling; and
• both intend to occupy the new dwelling as their only or main residence.

In that situation, the better view is that the joint purchase should still fall outside ADS, or be relieved from ADS, because the statutory spouse provisions are intended to allow one spouse’s qualifying replacement to carry through where the couple are buying a new home together.

Sixth, does it help to argue that the spouse had previously occupied the seller’s former property as a main residence?

Usually, that argument should not be needed on these facts. If the spouse never owned that earlier property, trying to prove that it was also the spouse’s main residence may complicate matters unnecessarily. The stronger analysis is that one spouse clearly satisfies the replacement disposal test and the couple are buying their new main residence together, with the other spouse owning no property.

Seventh, would the answer change if the new home were bought in the sole name of the spouse who sold the former main residence?

In practice, that would usually simplify the analysis further, because the sole buyer would plainly be the person who sold the previous main residence and still owns the buy-to-let. But on the facts described, the joint purchase should still be capable of falling outside ADS under the spouse provisions.

Eighth, does any “uninhabitable” argument arise here?

Not really. The facts point to a replacement of main residence case, not a claim that a property should be ignored because it was unsuitable for use as a dwelling. In any event, the threshold for an uninhabitable or not suitable for use argument is now relatively high following Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799. Ordinary disrepair, renovation needs, or a property being inconvenient to live in will often not be enough.

Outcome

On the facts described, the practical conclusion is that ADS should not apply to the joint purchase of the new main residence, provided the effective date of that purchase is within 36 months of the sale of the former main residence and the couple intend to occupy the new property as their only or main residence.

The key reasons are:

• the post-1 April 2024 replacement rule allows a 36-month look-back;
• the old home sale does not need to have been immediately before the new purchase;
• an intervening buy-to-let purchase does not by itself prevent replacement treatment; and
• the spouse rules support the result where one spouse has made the qualifying disposal and both are buying the new home to live in together.

Practical Steps

If you are assessing your own position, the main steps are:

1. Check the effective date of the new purchase. For the 36-month rule, this date is critical.
2. Confirm the date the former main residence was sold. Count back 36 months from the effective date of the new purchase.
3. Gather evidence that the sold property was your only or main residence during that 36-month period. Typical evidence includes electoral roll records, bank statements, council tax records, insurance, correspondence, and other documents showing day-to-day residence.
4. Gather evidence that the new property is intended to be your only or main residence from completion.
5. If buying jointly, confirm what property each buyer owns at the effective date and whether the buyers are spouses, civil partners, or cohabitants for the purposes of the legislation.
6. Review Revenue Scotland guidance, especially LBTT10020, alongside the statutory wording in Schedule 2A.
7. If the transaction is close to the 36-month deadline, take care over completion timing. A purchase even one day late may change the result.

Conclusion

Where a buyer sold a former main residence, later acquired a buy-to-let, and then buys a new home within 36 months to live in with a spouse, ADS should generally not apply under the post-1 April 2024 Scottish rules. The fact that the retained additional property was bought after the old home was sold does not, by itself, prevent replacement treatment.

Legal References Used

• Land and Buildings Transaction Tax (Scotland) Act 2013
• Land and Buildings Transaction Tax (Scotland) Act 2013, Schedule 2A
• Schedule 2A, paragraph 2
• Schedule 2A, paragraph 2(2)
• Schedule 2A, paragraph 5
• Schedule 2A, paragraph 9A
• Revenue Scotland guidance LBTT10020 – How to determine if an ‘only or main residence’ is being replaced
• SSI 2024/104
• The Land and Buildings Transaction Tax (Additional Amount Second Homes Main Residence Relief) (Scotland) Order 2017
• Amarjeet and Tajinder Mudan v The Commissioners for HMRC [2025] EWCA Civ 799

This page was last updated on 22 March 2026.

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