ADS Refund: Sell Your Old Home | Scotland Property Auction
Yes – if you pay the 8% Additional Dwelling Supplement (ADS) on a new Scottish home while still owning your old one, you can claim it back, but only if your old main residence is sold within 36 months of buying the new one. For most people that is a generous window. For anyone whose old home is stuck – unsold, awkward or unmortgageable – it can become the most expensive deadline of their life, and auction is one way to make that sale certain.
I'm Julie McAndrews, and I speak to owners every week who have bought their next home first and are now watching the clock on the one they're leaving. This guide explains the rule in plain English, shows what is at stake in pounds, and sets out when selling the old home at auction is the sensible way to protect your refund.
- ADS is 8% of the full purchase price for contracts entered into on or after 5 December 2024.
- For purchases completing on or after 1 April 2024, you have 36 months to sell your previous main residence and reclaim ADS (it was 18 months before that).
- Revenue Scotland says it is unable to consider exceptional circumstances – a slow sale does not extend the deadline.
- Selling at auction gives you a fixed date and a legally binding sale, with completion normally 28 days later.
- 8%ADS rate on the full price
- 36 monthsto sell your old home
- 28 daystypical auction completion
- £0extension for "exceptional circumstances"
What is the Additional Dwelling Supplement in Scotland?
ADS is an extra layer of Land and Buildings Transaction Tax (LBTT) charged when you buy a residential property in Scotland and, at the end of the day of purchase, you will own more than one home. It is charged on top of ordinary LBTT, and it is calculated on the whole purchase price, not just the part above a threshold.
The rate has moved several times. According to Revenue Scotland it was 3% originally, 4% from 25 January 2019, 6% from 16 December 2022 and 8% for contracts entered into on or after 5 December 2024. If your contract was signed on or before 4 December 2024, the 6% rate can still apply, even if the property completed later.
How much ADS could you be reclaiming?
Because the supplement is a flat percentage of the full price, the sums get big quickly. These are straightforward calculations at 8% – they show the ADS element only and exclude ordinary LBTT.
| New home price | ADS at 8% | What it means |
|---|---|---|
| £150,000 | £12,000 | Paid on top of standard LBTT |
| £250,000 | £20,000 | Refundable if old home sold in time |
| £350,000 | £28,000 | Lost if the deadline is missed |
| £500,000 | £40,000 | A very expensive missed deadline |
Compare that with the usual cost of selling a home and it becomes clear why a slow or failed sale can matter far more than the headline price you accept.
What are the conditions for reclaiming ADS?
Revenue Scotland sets out three conditions. You can claim a repayment if:
- you sell your previous property within 36 months of the date of buying the new one;
- the property you sold was your only or main residence at any time in the 36 months before you bought the new property; and
- you have lived in the property you paid ADS on as your only or main residence.
For joint buyers, all must meet the conditions for purchases on or after 1 April 2024, although only one buyer needs to meet the first two conditions – both must meet the third. Spouses, civil partners and cohabitants have special rules, so check your own circumstances with your solicitor.
How long do you have to sell your old home – 18 or 36 months?
It depends on the date you bought the new property. The older, shorter limit still applies to older purchases.
| Effective date of new purchase | Time to sell previous main residence |
|---|---|
| Up to and including 31 March 2024 | 18 months |
| On or after 1 April 2024 | 36 months |
If you bought in 2024 or later, you almost certainly have the longer window. That sounds like plenty of time, and it often is. The trouble starts when the property will not sell.
Will Revenue Scotland extend the deadline if my sale falls through?
No. Revenue Scotland states that it "is unable to consider any exceptional circumstances". Their own examples show that a delayed sale – for instance, because of mortgage complications – does not stop ADS being charged on the new purchase. You can still claim the refund if the old home sells within the window, but if the 36 months pass, the right to reclaim has gone.
That is why homeowners with a difficult old property should treat the 36-month date as a hard stop, and work backwards from it. Building in a safety margin of six to twelve months is sensible.
Which old homes struggle to sell in time?
Most ordinary homes sell within the window. The risk sits with properties that high-street buyers and mortgage lenders find difficult. Typical examples we see include:
- Homes that fail a mortgage valuation – see our guide to unmortgageable homes at auction.
- Properties in poor condition or needing major repair – read about poor-condition homes.
- Properties with a Category 3 Home Report – we explain this in Home Report Category 3.
- Inherited or probate homes where several people must agree – see inherited property at auction.
- Homes with title or legal complications that scare off buyers who need a lender.
If your old home is in one of these groups, a normal open-market listing can drift for months. Each failed sale loses weeks, and the clock does not stop.
Why does an auction help protect an ADS refund?
An auction gives you something a normal sale rarely does: certainty of timing. When your offer is accepted on the day, the sale is legally binding, and completion is normally 28 days later. In Scotland a traditional auction contract is concluded by the exchange of missives after the hammer falls, rather than leaving the buyer free to walk away. Our guide to whether an auction is binding in Scotland explains how this works.
- A fixed sale date you can plan your ADS deadline around
- Binding contract and a completion date typically 28 days after the sale
- Buyers are often cash or bridging-funded, so mortgage valuation risk is reduced
- Suits homes that high-street lenders will not touch
- The price depends on bidding on the day, so it is not guaranteed
- You need a sensible reserve price – set too high and the lot may not sell
- Some fees and legal packs to arrange up front
- If you have plenty of time, a conventional sale may still achieve more
For a straight comparison of the two routes, see auction vs estate agent in Scotland, and for the process itself read how do I sell my house at auction.
How quickly can an old home be sold at auction?
Preparation is the part people underestimate. A typical timeline looks like this, though every case is different.
| Stage | What happens |
|---|---|
| Valuation | We assess the property and discuss guide and reserve – start with a free valuation |
| Preparation | Home Report, legal pack and marketing are put together |
| Marketing | The lot is listed so buyers can review the paperwork and register to bid |
| Sale day | If the reserve is met, the sale is agreed and missives are concluded |
| Completion | Normally 28 days after the sale, with funds paid and keys handed over |
Our article on how long it takes to sell at auction gives a week-by-week breakdown, and Modern Method of Auction explains the alternative route, which allows a longer reservation period.
What is a sensible plan if you are buying before you sell?
Here is how I would approach it with a client. None of this replaces advice from your solicitor, but it gives you a framework.
- Write down the date. Work out exactly when 36 months runs out from the effective date of your new purchase.
- Be honest about the old home. If it is a standard property in a good area, a normal listing may do. If it has any of the issues above, assume it will be slower.
- Set a trigger date. For example, if the home has not sold by 18 months in, you move to a faster route.
- Get the paperwork ready early. Auction is quicker when the title, Home Report and legal pack are in order.
- Tell your solicitor your plan, so the ADS repayment claim is filed promptly once the old home completes.
Is it ever better to sell on the open market first?
Often, yes. If you have time and the property is in good order, there is no need to rush to auction. A conventional sale may achieve a higher price, and the 36-month window gives you real room to try. Our recommendation is simple: use the open market while the deadline is comfortable, and keep auction as your backstop.
It also helps to understand where an open-market sale can stall. Our guide to Sold STC in the Scottish property market explains why a "sold subject to contract" board does not mean a done deal, and the Scottish property terms glossary covers the jargon you will meet along the way.
What happens if I miss the 36-month deadline?
If you do not sell the previous main residence in time, you cannot reclaim the ADS you paid, and Revenue Scotland says it cannot consider exceptional circumstances. At 8% of the price, that can mean tens of thousands of pounds lost. This is exactly why people with problem properties should not wait until the final months.
If you are also under pressure from a lender, our guides on repossessed houses in Scotland and stopping repossession in Scotland explain your options.
What mistakes do people make with the ADS deadline?
In my experience the problems are rarely about the law itself – they are about assumptions made early on and never revisited.
- Assuming a "sold" board means the money is safe. Until the old home completes, nothing has been sold for ADS purposes. A buyer who pulls out resets the clock on your patience, not on the 36 months.
- Waiting until the last year. Problem properties lose months to survey issues, lender refusals and re-marketing. Those months come out of your window.
- Forgetting who must meet the conditions. With joint owners, both buyers must live in the new home as their only or main residence, so agree the plan between you.
- Treating the refund as automatic. You still need to make the repayment claim once the old home has been sold, so ask your solicitor to diarise it.
- Pricing the old home out of the market. An unrealistic asking price is the commonest reason a sale drifts. A frank valuation early on saves months.
What if I am buying and selling in the same weeks?
If your old home is already under offer when you buy the new one, you may be able to avoid the problem altogether, because ADS is about what you own at the end of the day of purchase. Your solicitor will advise whether the supplement applies on your particular timeline. Where the old home is not yet sold, though, the supplement is paid first and reclaimed later, which is why having a reliable exit for the old property matters so much.
Next steps
If you've bought your next home and your old one isn't moving, ask for a no-obligation valuation. We'll tell you honestly whether auction suits your property, what a realistic reserve looks like, and how the timeline fits your ADS date. Start here: request your valuation or see our overview on how to sell your property.
This article is general information only and not legal or tax advice. Rules and rates change, so confirm the current position with your solicitor and Revenue Scotland.
Source: Revenue Scotland
Founder & Director of Scotland Property Auction, with 10+ years helping Scottish homeowners sell fast at auction.
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