Guidance on LBTT Tax Relief for Crofting Community Right to Buy

LBTT relief for crofting community right to buy purchases

In Scotland, full relief from Land and Buildings Transaction Tax may be available where a crofting community buys land using the statutory crofting community right to buy and the transaction includes two or more crofts. This is a narrow relief, not a general exemption for community or croft-related purchases, and it must be claimed through the normal LBTT return process.

• The buyer must be a qualifying crofting community, and the purchase must be made under the statutory crofting community right to buy.
• The relief only applies if the transaction is a chargeable transaction and includes the purchase of two or more crofts.
• If all conditions are met, the relief gives full exemption from LBTT on that purchase.
• The relief is unlikely to apply to a private purchase outside the statutory framework or to the purchase of a single croft.
• Care is needed where the land includes mixed property or where it is unclear whether the land being bought counts as crofts.
• Even where no LBTT is payable, the relief should still be claimed through the LBTT return process in line with Revenue Scotland requirements.

Scroll down for the full analysis.

LBTT relief for purchases under a crofting community right to buy

This page explains a narrow but important LBTT relief in Scotland. If land is bought by a crofting community using the statutory crofting community right to buy, the transaction may qualify for full relief from Land and Buildings Transaction Tax. The relief is not available for every community purchase. The official rule is limited, and the conditions matter.

What this rule is about

LBTT normally applies when land or buildings in Scotland are acquired in a chargeable transaction. Schedule 9 to the Land and Buildings Transaction Tax (Scotland) Act 2013 provides a specific exemption-style relief for certain community acquisitions.

The relief covered here applies where a crofting community buys land by using the “crofting community right to buy”. The policy behind it is to remove LBTT as a tax cost where a qualifying crofting community exercises that statutory right in the required way.

This is not a general relief for community bodies, rural land purchases, or croft-related transactions. It is tied to a particular legal route for acquisition and to a particular type of buyer.

What the official source says

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

• there is a chargeable transaction,
• the buyer is a crofting community,
• 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 met, the relief is full relief from LBTT on that purchase.

The source cites schedule 9 to the LBTT(S)A 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 simple if the conditions are clearly met: no LBTT is payable on the qualifying acquisition.

But the gateway conditions are narrow. In practice, the key questions are usually:

• Is the purchaser legally a “crofting community” for the purposes of the statutory right to buy?
• Is the acquisition actually being made under that statutory right, rather than by ordinary voluntary purchase?
• Does the transaction involve the purchase of two or more crofts?

If the answer to any of those questions is no, this specific relief may not apply.

The phrase “in pursuance of a crofting community right to buy” matters. It suggests a direct link between the transaction and the statutory right itself. A purchase that merely resembles such a transaction, or that is negotiated outside that legal framework, is not obviously within the relief based on the wording provided.

The requirement that “two or more crofts are being bought” also matters. The relief is not described as applying to the purchase of a single croft. The official text does not expand on how that condition works in more complicated factual situations, so care is needed where the land being acquired includes mixed property or where the status of the units as crofts is not straightforward.

How to analyse it

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

First, identify the legal basis of the acquisition. The relief is aimed at transactions made under the crofting community right to buy. You should be able to point to the statutory process or entitlement under which the purchase is taking place.

Second, identify the purchaser. The source refers specifically to a purchase made by a crofting community. The status of the buyer is therefore part of the test, not just the nature of the land.

Third, identify what is being acquired. The official wording requires that two or more crofts are being bought under the transaction. That means the composition of the property being transferred is relevant.

Fourth, consider whether the transaction is chargeable in the first place. The relief operates on a chargeable transaction, so the usual LBTT framework still matters. The relief then removes the tax charge if the conditions are met.

Fifth, consider the return position. The source indicates that the relief is claimed through the LBTT return process. In other words, this is not simply a matter of deciding no tax is due and doing nothing. The transaction still needs to be handled through the normal LBTT compliance route in the way Revenue Scotland requires.

Example

A crofting community body acquires land through the statutory crofting community right to buy. The transaction covers three crofts. On the facts given, this is the kind of case the relief is designed for. If the statutory conditions are met, full LBTT relief may be claimed, so no LBTT would be payable on that purchase.

By contrast, if a community body buys only one croft, or buys land by private agreement outside the crofting community right to buy framework, this specific relief is not clearly available on the wording of the source.

Why this can be difficult in practice

The official guidance is brief. It states the conditions, but does not explain several points that may matter in real transactions.

One difficulty is identifying whether the purchase is truly “in pursuance of” the crofting community right to buy. Some acquisitions may involve negotiation, variation, or a mixture of statutory and consensual steps. The source does not spell out where the boundary lies.

Another difficulty is the requirement that two or more crofts are being bought. The source does not explain how to treat land that includes crofts plus other land, or how to analyse property where croft status may be disputed or unclear from the title documentation alone.

A further practical point is that this is a relief within the LBTT system, not a separate land-law approval. Meeting crofting law requirements and meeting LBTT relief requirements are related, but they are not exactly the same question. The tax analysis still needs to be done carefully.

Key takeaways

• This is a specific LBTT relief for purchases by a crofting community under the statutory crofting community right to buy.
• The relief is only available where the transaction is in pursuance of that right and involves the purchase of two or more crofts.
• 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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