Landlords, investors and second homeowners paid £230m through Scotland’s Additional Dwelling Supplement (ADS) in the latest 12-month period.
The data from DJ Alexander, Scotland’s largest lettings and estate agency, reveals that total Land and Buildings Transaction Tax (LBTT) receipts reached a record £758.1m between July 2025 and June.
However, revenue rose by only a couple of million pounds in recent months, prompting the firm to question whether the tax take has peaked.
ADS receipts were £51.6m higher than a year earlier, with the firm describing the figure as a 300% increase over the past decade.
Revenue growth slows
The firm’s managing director, David Alexander, said: “The statistics show that the rate of revenue increases is stalling.
“This could well be because of market conditions but may also be due to individuals and investors becoming more unwilling to pay such a high level of property taxation.”
He added: “There are already signs that people in larger homes are holding off moving because the transaction costs are prohibitive and a block at any stage in the housing market causes a stalling in sales.
“If there are no larger houses to move to those in smaller homes have fewer options and this impacts the market as a whole.”
Mr Alexander went on to say that a homebuyer’s ability to pay more tax for purchasing a property becomes untenable.
More buyers taxed
The proportion of buyers paying no LBTT has fallen from 52.4% in 2015 to 29.9% by June.
That means 70.1% of buyers now pay the tax when purchasing a home in Scotland.
Some 21,320 transactions above £325,001 generated £441.1m, accounting for 83.5% of the £528.1m raised from residential LBTT once ADS receipts were removed.
The average tax charged to buyers within those transactions was £20,820.
Supplement receipts climb
LBTT raised £201.9m during its first year after being introduced in April 2015.
ADS followed in April 2016 and generated £76.1m in its first year.
Mr Alexander said landlords and investors may now be reconsidering purchases because Scotland’s charges are higher than those elsewhere in the UK.
He also argued that some higher-rate taxpayers and buyers of more expensive homes could change their behaviour by moving to a lower-tax area in England.
