Additional Dwelling Supplement (ADS) Explained


Additional Dwelling Supplement, more commonly known as ‘ADS’ will be a familiar phrase to those who have recently, or indeed are currently, purchasing property in Scotland. ADS has been in place for almost 3 years now, with its introduction in Scotland on 1st April 2016.



What is ADS

Put simply, ADS is payable when an individual purchases a second home for more than £40,000 and that individual is not replacing a main residence. There are circumstances whereby ADS is always payable and one of these is when a Company purchases a residence.

When do you need to pay ADS

Scenarios such as the purchase of an investment property to let, or the purchase of a holiday home would attract ADS. ADS is payable on top of standard LBTT (Land and Buildings Transaction Tax) and is very much, as it says, an additional payment.

How much is ADS

Chargeable at a rate of 4%, ADS is based on the consideration applicable to the transaction in question. The consideration is often the purchase price.

ADS rate increase

It’s worth noting that the original 3% rate of ADS increased to 4% on 25th January 2019.  Finance Secretary, Derek MacKay, announced the proposed increase in his December 2018 budget and this has now been approved by Scottish Parliament.

How can I find out if I need to pay ADS

It can be difficult to determine whether you are liable to pay ADS. Your solicitor or financial advisor will have to ask several questions to determine your liability for tax. Questions such as

‘Do you own another property?’

‘Do you own property anywhere else in the world?’

‘Does your wife, husband, spouse own any other property?’

‘Are you selling a main residence?’

These questions are often asked of buyers before they have even set foot in a property advertised for sale.  The general rules surrounding ADS and many exceptions can be difficult to decipher and that’s why it is important to obtain the right advice from the outset.


Our dedicated conveyancing specialists are on hand to help.  Call 0131 661 5911 or email