Gillespie Gifford & Brown

Scottish Government extends ADS reclaim time


The Scottish Government has taken steps to extend the time available to reclaim the Additional Dwelling Supplement. The ADS was introduced a few years ago to try to help first-time compete with buy-to-let landlords where it was felt that the latter were pricing first-time buyers out of the market.

The ADS is a charge of 4% on the price of the property and is payable in addition to any Land & Buildings Transaction Tax payable. This means that any buy-to-let landlord, company or other organisation buying a residential property had to pay the ADS.

However, the introduction of the ADS has had some unintended consequences. It means that if an individual purchases a new house to be used as their own main residence but it unable to sell their existing home, they will have to pay the ADS. If that happens, when the exiting home is subsequently sold, the individual can then reclaim the ADS from Revenue Scotland.

There is, however, a time limit within which the ADS paid can be reclaimed. That limit was set at 18 months but due to the coronavirus lockdown and the property market in Scotland being brought to a sudden halt, the Scottish Government has extended the time within which the ADS can be reclaimed by 18 months. That means you now have up to 36 months to reclaim the ADS. However, this provision only applies to buyers who purchased their new main residence between 24 September 2018 and 24 March 2020.

There’s more good news for those who are stuck in this position. The property market in Scotland is set to re-start on 19 June as Scotland moves into phase 2 of the Route Map out of Lockdown. This means you can again put your property on the market and allow viewing. You can again move house, provided you practise social distancing.

If you do need any assistance with or have questions about the Additional Dwelling Supplement or Land & Buildings Transaction Tax, please get in touch with us.

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