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Period During Which Home Movers Can Reclaim ADS Extended

There was some welcome news for home movers in the Coronavirus (Scotland) (No.2) Bill which was passed on Wednesday 20 May and is expected to receive Royal Assent soon thereafter. As part of the emergency measures in the Bill, the period during which a main residence can be sold and repayment of the Additional Dwelling Supplement can be claimed has been temporarily increased from 18 months to 36 months.

What is the Additional Dwelling Supplement?
In simple terms the Additional Dwelling Supplement (ADS) is a tax paid by the purchaser on the purchase of ‘additional homes’. As with many tax matters the details can be complex and it is important to discuss the circumstances of your purchase with your solicitor and/or financial adviser to establish if you are liable to pay the tax, but most commonly it applies to the purchase of second homes or buy-to-let properties.

ADS is charged at 4% of the full purchase price of the property and it is payable in additional to the regular Land & Buildings Transaction Tax (LBTT).

What do the changes mean?
It is not uncommon for home movers to complete the purchase of their new home before completing the sale of their existing property. In such cases ADS must be paid but can be reclaimed as long as the sale of the existing property is completed within 18 months.

For purchase transactions completing within the period between 24 September 2018 and 24 March 2020, the period in which to complete the sale of the previous main home has been period has now been extended to 36 months, giving affected home movers more time to sell their existing property to allow for delays caused by the COVID-19 pandemic and associated restrictions on movement.

Are these changes permanent?
No. The measurers in the Bill will initially be in force until 30 September 2020. There are provisions in the Bill that allow this to be extended for two six-month periods should this be deemed necessary.

Will all recent purchases be affected?
The Bill relates to purchases settled between 24 September 2018 and 24 March 2020. It is important that you speak to your lawyer and your financial adviser however, firstly to ensure that the circumstances of your move allow you to reclaim ADS, and secondly to ensure that the extension applies to you.

If you are considering buying or selling a home, get in touch with Warners today on 0131 662 4747 or by email at

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