diff --git a/tools/lsp/preview/drop_location.rs b/tools/lsp/preview/drop_location.rs
index 21ba6088b..4080dffcd 100644
--- a/tools/lsp/preview/drop_location.rs
+++ b/tools/lsp/preview/drop_location.rs
@@ -1,7 +1,6 @@
 // Copyright © SixtyFPS GmbH <info@slint.dev>
 // SPDX-License-Identifier: GPL-3.0-only OR LicenseRef-Slint-Royalty-free-1.1 OR LicenseRef-Slint-commercial
 
-use i_slint_compiler::object_tree::ElementRc;
 use i_slint_core::lengths::{LogicalLength, LogicalPoint};
 use slint_interpreter::ComponentInstance;
 
@@ -10,9 +9,10 @@ use crate::preview::element_selection::collect_all_element_nodes_covering;
 #[cfg(target_arch = "wasm32")]
 use crate::wasm_prelude::*;
 
+use super::element_selection::ElementRcNode;
+
 pub struct DropInformation {
-    pub target_element: ElementRc,
-    pub node_index: usize,
+    pub target_element_node: ElementRcNode,
     pub insertion_position: crate::common::VersionedPosition,
 }
 
@@ -21,24 +21,27 @@ fn find_drop_location(
     x: f32,
     y: f32,
 ) -> Option<DropInformation> {
-    let elements = collect_all_element_nodes_covering(x, y, &component_instance);
-    let (node_index, target_element) = elements.iter().find_map(|sc| {
-        sc.element
-            .borrow()
-            .debug
-            .iter()
-            .position(|d| !super::is_element_node_ignored(&d.0))
-            .map(|i| (i, sc.element.clone()))
-    })?;
+    let target_element_node = {
+        let mut result = None;
+        for sc in &collect_all_element_nodes_covering(x, y, &component_instance) {
+            let Some(en) = sc.as_element_node() else {
+                continue;
+            };
+
+            if en.on_element_node(|n| super::is_element_node_ignored(n)) {
+                continue;
+            }
+
+            result = Some(en);
+            break;
+        }
+        result
+    }?;
 
     let insertion_position = {
-        let elem = target_element.borrow();
+        let elem = target_element_node.element.borrow();
 
-        let (node, layout) = elem.debug.get(node_index)?;
-
-        if layout.is_some() {
-            return None;
-        }
+        let (node, _) = elem.debug.get(target_element_node.debug_index)?;
 
         let last_token = crate::util::last_non_ws_token(node)?;
 
@@ -53,7 +56,7 @@ fn find_drop_location(
         )
     };
 
-    Some(DropInformation { target_element, node_index, insertion_position })
+    Some(DropInformation { target_element_node, insertion_position })
 }
 
 /// Find the Element to insert into. None means we can not insert at this point.
@@ -79,8 +82,10 @@ pub fn drop_at(
         let click_position =
             LogicalPoint::from_lengths(LogicalLength::new(x), LogicalLength::new(y));
 
-        if let Some(area) = component_instance
-            .element_position(&drop_info.target_element)
+        if drop_info.target_element_node.is_layout() {
+            vec![]
+        } else if let Some(area) = component_instance
+            .element_position(&drop_info.target_element_node.element)
             .iter()
             .find(|p| p.contains(click_position))
         {
@@ -95,7 +100,11 @@ pub fn drop_at(
 
     let indentation = format!(
         "{}    ",
-        crate::util::find_element_indent(&drop_info.target_element).unwrap_or_default()
+        crate::util::find_element_node_indent(
+            &drop_info.target_element_node.element,
+            drop_info.target_element_node.debug_index
+        )
+        .unwrap_or_default()
     );
 
     let component_text = if properties.is_empty() {
diff --git a/tools/lsp/preview/element_selection.rs b/tools/lsp/preview/element_selection.rs
index d5eebf1ac..82420c72d 100644
--- a/tools/lsp/preview/element_selection.rs
+++ b/tools/lsp/preview/element_selection.rs
@@ -27,6 +27,18 @@ impl ElementRcNode {
         Some(Self { element, debug_index })
     }
 
+    pub fn on_element_debug<R>(
+        &self,
+        func: impl Fn(
+            &i_slint_compiler::parser::syntax_nodes::Element,
+            &Option<i_slint_compiler::layout::Layout>,
+        ) -> R,
+    ) -> R {
+        let elem = self.element.borrow();
+        let (n, l) = &elem.debug.get(self.debug_index).unwrap();
+        func(n, l)
+    }
+
     pub fn on_element_node<R>(
         &self,
         func: impl Fn(&i_slint_compiler::parser::syntax_nodes::Element) -> R,
@@ -40,6 +52,10 @@ impl ElementRcNode {
             (n.source_file.path().to_owned(), u32::from(n.text_range().start()))
         })
     }
+
+    pub fn is_layout(&self) -> bool {
+        self.on_element_debug(|_, l| l.is_some())
+    }
 }
 
 #[derive(Clone, Debug)]
diff --git a/tools/lsp/util.rs b/tools/lsp/util.rs
index 752f82986..c9b96252a 100644
--- a/tools/lsp/util.rs
+++ b/tools/lsp/util.rs
@@ -70,6 +70,19 @@ pub fn find_element_indent(element: &ElementRc) -> Option<String> {
     None
 }
 
+/// Find the indentation of the element itself as well as the indentation of properties inside the element.
+/// Returns the element indent followed by the block indent
+pub fn find_element_node_indent(element: &ElementRc, debug_index: usize) -> Option<String> {
+    let mut token = element.borrow().debug.get(debug_index)?.0.first_token()?.prev_token();
+    while let Some(t) = token {
+        if t.kind() == SyntaxKind::Whitespace && t.text().contains('\n') {
+            return t.text().split('\n').last().map(|s| s.to_owned());
+        }
+        token = t.prev_token();
+    }
+    None
+}
+
 /// Given a node within an element, return the Type for the Element under that node.
 /// (If node is an element, return the Type for that element, otherwise the type of the element under it)
 /// Will return `Foo` in the following example where `|` is the cursor.