Revenue Scotland LBTT: Guide to Claiming Repayment for Additional Dwelling Supplement in Scotland
Claiming Repayment of Additional Dwelling Supplement (ADS)
This page provides guidance on how to claim a repayment of the Additional Dwelling Supplement (ADS) in Scotland, which varies depending on the claimant. The principles and concepts are outlined as follows:
- Understanding who is eligible to make a claim for ADS repayment.
- Detailed steps on the process of submitting a claim.
- Information on necessary documentation and evidence required.
- Guidance on timelines and deadlines for making a claim.
Read the original guidance here:
Revenue Scotland LBTT: Guide to Claiming Repayment for Additional Dwelling Supplement in Scotland
Understanding the Additional Dwelling Supplement (ADS) and How to Claim a Repayment
The Additional Dwelling Supplement (ADS) is an important aspect of property transactions in Scotland. It is a tax applied when purchasing an additional residential property, such as a second home or a buy-to-let investment. Understanding how ADS works and the process for claiming a repayment can be beneficial for property buyers in Scotland.
What is the Additional Dwelling Supplement (ADS)?
ADS is a tax that applies when you buy an additional residential property in Scotland. This could be a second home, a holiday home, or a property intended for rental purposes. The supplement is an extra charge on top of the standard Land and Buildings Transaction Tax (LBTT) and is calculated as a percentage of the purchase price of the property.
Why is ADS Charged?
The purpose of ADS is to help manage the housing market by discouraging the purchase of additional properties, which can drive up prices and reduce the availability of homes for first-time buyers. By imposing this tax, the Scottish Government aims to make housing more accessible to those who are purchasing their first home.
How is ADS Calculated?
ADS is calculated as a percentage of the total purchase price of the additional property. As of the latest guidelines, the rate is set at 4%. For example, if you purchase a second home for £200,000, the ADS would be £8,000 (4% of £200,000).
Example Calculation
- Purchase Price: £200,000
- ADS Rate: 4%
- ADS Amount: £200,000 x 0.04 = £8,000
It’s important to note that ADS is payable in addition to the standard LBTT, which is calculated separately based on the property’s value.
Who Needs to Pay ADS?
ADS applies to individuals and companies purchasing additional residential properties in Scotland. This includes:
- Individuals buying a second home or a holiday home.
- Buy-to-let investors purchasing rental properties.
- Companies acquiring residential properties.
First-time buyers purchasing their first home are exempt from ADS, as the tax is specifically targeted at those acquiring additional properties.
Claiming a Repayment of ADS
In certain circumstances, you may be eligible to claim a repayment of ADS. This typically occurs if you sell your previous main residence within 18 months of purchasing your new property. The process for claiming a repayment depends on who is making the claim.
Eligibility for Repayment
To be eligible for an ADS repayment, you must meet the following criteria:
- You have purchased a new main residence and paid ADS on the transaction.
- You have sold your previous main residence within 18 months of purchasing the new property.
- The sale of the previous main residence was completed after the purchase of the new property.
How to Claim a Repayment
The process for claiming a repayment of ADS varies depending on whether you are an individual or a company. Detailed guidance on how to submit a claim can be found on the Revenue Scotland website. For more information, visit the Revenue Scotland ADS Repayment Guide.
Steps to Claim a Repayment
Here is a general overview of the steps involved in claiming a repayment of ADS:
- Ensure you meet the eligibility criteria for a repayment.
- Gather all necessary documentation, including proof of the sale of your previous main residence.
- Complete the relevant forms as outlined by Revenue Scotland.
- Submit your claim to Revenue Scotland for processing.
- Await confirmation and processing of your repayment claim.
It’s important to keep accurate records and documentation to support your claim, as this will help ensure a smooth and efficient process.
Common Questions About ADS
What if I Don’t Sell My Previous Main Residence Within 18 Months?
If you do not sell your previous main residence within the 18-month window, you will not be eligible for a repayment of ADS. It is crucial to complete the sale within this timeframe to qualify for a refund.
Can I Claim a Repayment if I Inherit a Property?
Inheriting a property does not typically trigger ADS, as the tax applies to purchases. However, if you subsequently purchase an additional property, ADS may apply, and you would need to meet the standard criteria for a repayment claim.
What Happens if My Circumstances Change?
If your circumstances change, such as a change in your main residence, it’s important to review your situation in relation to ADS. You may need to seek advice or assistance to understand how these changes affect your tax obligations.
Conclusion
The Additional Dwelling Supplement is an important consideration for anyone purchasing additional residential properties in Scotland. Understanding how ADS works, how it is calculated, and the process for claiming a repayment can help you manage your property transactions more effectively. For further guidance and detailed information, visit the Revenue Scotland ADS Repayment Guide.
Useful article? You may find it helpful to read the original guidance here: Revenue Scotland LBTT: Guide to Claiming Repayment for Additional Dwelling Supplement in Scotland
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