Many property sales have been slowed down or halted altogether because of the closure of the Land Register and the restrictions on moving house due to COVID-19. One serious implication of this is for those seeking to claim replacement of main residence relief from the LBTT 4% Additional Dwelling Supplement (ADS).

Where individuals bought their new main residence before selling the old one, they have to pay ADS on the purchase, but if the old main residence is sold within 18 months the ADS can be reclaimed. COVID-19 means many people may not meet the 18 month deadline.

The Scottish Government has listened to the concerns of taxpayers and intends to extend the 18 month period in the next Coronavirus (Scotland) Bill.Michael Russell MSP, Cabinet Secretary for the Constitution, Europe and External Affairs announced the proposed extension in an update to the Scottish Parliament about the new bill on 28 April 2020 :-

Reflecting the realities of our housing market, for those who had paid the Land and Buildings Transaction Tax (LBTT) Additional Dwelling Supplement prior to a particular date, the Bill will extend the time period during which a previous main residence must be sold in order for them to claim a repayment from Revenue Scotland.

See the full statement at this link

Details are eagerly awaited of how long the extension will be, and how far back the relief will go. The equivalent time period for SDLT is actually 3 years, and perhaps that may be influence what the Scottish Government decides to do.

Following operational changes due to COVID-19, ADS repayment claims can now only be made online – paper claims are no longer accepted:-

It is worth bearing in mind that replacement of main residence relief can only be claimed where seller(s) have occupied the house which is sold as their main residence at some point in the 18 months before the purchase of the new house.

Further updates on the extension to the 18 month ADS reclaim period will follow as soon as they are available.


Isobel d'Inverno

Director of Corporate Tax