Guidance on LBTT Tax Relief for Crofting Community Right to Buy

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LBTT relief for purchases under a crofting community right to buy

This page explains a specific Land and Buildings Transaction Tax relief in Scotland. It applies where a crofting community buys land using the statutory crofting community right to buy. If the conditions are met, the purchase can qualify for full relief from LBTT, so no LBTT is payable on that transaction.

What this rule is about

LBTT is usually charged on land transactions in Scotland unless a relief applies. Schedule 9 to the Land and Buildings Transaction Tax (Scotland) Act 2013 provides a relief for certain community acquisitions connected with crofting law.

The point of this relief is narrow. It is not a general exemption for community purchases, rural land, or crofting land. It is aimed at purchases made by a crofting community where the transaction is carried out under the statutory “crofting community right to buy”.

What the official source says

The official guidance says that full LBTT relief may be available where:

• there is a chargeable transaction,
• the transaction is entered into in pursuance of a crofting community right to buy, and
• under that transaction, two or more crofts are being bought.

Where those conditions are satisfied, the relief is full relief from LBTT. In other words, the tax charge is reduced to nil for that transaction.

The source identifies the legal basis as schedule 9 to the Land and Buildings Transaction Tax (Scotland) Act 2013, as amended by the Land and Buildings Transaction Tax (Addition and Modification of Reliefs) (Scotland) Order 2015.

What this means in practice

The practical effect is straightforward if the statutory conditions are met: the crofting community still has a chargeable land transaction, but LBTT is fully relieved.

That matters because a buyer should not assume that a community-based purchase is automatically outside LBTT. The transaction still needs to be analysed under the normal LBTT framework first. Relief then depends on whether this specific schedule 9 relief applies.

The key practical questions are:

• Is the buyer a crofting community for the purposes of the relevant right to buy?
• Is the purchase actually made in pursuance of the crofting community right to buy, rather than by ordinary private agreement outside that statutory route?
• Does the transaction involve the purchase of two or more crofts?

If the answer to any of those points is no, this particular relief may not be available.

The official material also indicates that the relief must be claimed through the LBTT return process. So even where no tax is ultimately payable, the transaction may still need to be reported in the usual way, with the relief claimed in the return.

How to analyse it

A sensible way to approach this relief is to work through the transaction in stages.

1. Identify whether there is a chargeable transaction for LBTT purposes. This relief does not replace the normal starting point that a land transaction may be chargeable.

2. Check the legal route by which the acquisition is taking place. The source is specific: the transaction must be entered into in pursuance of the crofting community right to buy. That suggests a direct connection with the statutory right, not simply a purchase by a body that happens to represent a crofting community.

3. Check what is being bought under the transaction. The source says that two or more crofts must be being bought under that transaction. The number of crofts is therefore part of the relief condition, not just background detail.

4. Consider whether the return needs to be made and the relief claimed. The guidance points readers to the general LBTT return and payment process rather than suggesting the relief applies automatically without a claim.

Example

Illustration: a qualifying crofting community completes a land purchase using the statutory crofting community right to buy. The transaction covers three crofts. On the facts given by the source, that transaction is the kind of purchase for which full LBTT relief may be available, provided the relief is properly claimed.

By contrast, if a crofting body buys only one croft, or buys land by ordinary negotiation rather than under the crofting community right to buy, the source does not indicate that this relief would apply.

Why this can be difficult in practice

The official guidance is brief, so the main difficulty is usually not the tax effect but whether the legal conditions are truly met.

In particular, the phrase “in pursuance of a crofting community right to buy” can matter a great deal. A transaction may involve a crofting community and croft land, but that does not necessarily mean it is carried out under the statutory right referred to by the relief.

Another practical issue is identifying what counts as “two or more crofts” under the transaction. The source states this as a condition but does not elaborate on edge cases, such as mixed acquisitions or more complex land packages. In those situations, the precise legal documentation and the statutory crofting framework may be important.

The source also says that full relief may be available, which reflects that eligibility depends on the facts and the legislation. It should not be read as meaning every community purchase involving croft land qualifies.

Key takeaways

• This is a specific LBTT relief for purchases made by a crofting community under the statutory crofting community right to buy.
• The transaction must involve the purchase of two or more crofts for the relief to be available.
• If the conditions are met, the relief is full relief from LBTT, but it still needs to be claimed through the LBTT return process.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on LBTT Tax Relief for Crofting Community Right to Buy

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