Land Transaction Tax (LTT) has now replaced stamp duty in Wales
Land Transaction Tax for Wales
Land Transaction Tax is payable when you lease or buy a property or land that is over a certain price. The LTT is still loosely consistent with the existing SDLT system that is used across England and Northern Ireland.
The Welsh Government announced the new LTT system in the October 2017 budget review and was put in place in April 2018.
The new changes have been created to improve taxation effectiveness, to allow focus for Welsh needs and priorities and to ultimately make the new tax fairer.
Welsh LTT rates
LTT is broadly based on SDLT with buyers paying tax on amounts between bands, not on the full purchase price of a property. New LTT rates and bands were introduced from April 2018.
LTT rates in Wales
Current rates are shown below:
|Tax Band||Normal Rate||Additional Property|
|less than £180k||0%||3%*|
|£180k to £250k||3.5%||6.5%|
|£250k to £400k||5%||8%|
|£400k to £750k||7.5%||10.5%|
|£750k to £1.5m||10%||13%|
|rest over £1.5m||12%||15%|
|* Under the new LTT structure an additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £180k the LTT rate will be 3% on full purchase price.|
The first £180,000 is exempt for normal properties. Buyers will pay 3.5% within the band £180,000 and £250,000, between £250,000 and £400,000 it will be 5%, the portion between £400,00 and £750,000 is 7.5%. You will pay 10% within the next band up to £1.5 million and 1% of this.
Remember for any additional property there will be a 3% surcharge applied to all bands on properties such as buy to lets and second homes.
LTT on additional properties
As with the rest of the UK, surcharges applies to the full purchase price above an initial threshold of £40,000. The new LTT system dictates that a 3% surcharge applies to all transactions that involve an additional property.
LTT and first time buyers
Unfortunately first-time buyer relief isn’t available under the new LTT system but a higher tax threshold is. You shouldn’t pay any tax as long as you purchase within the £180,000 mark.
How much LTT will I need to pay?
The LTT calculators below indicate how much tax is payable for both single and additional freehold residential property purchases in Wales. The Figures are valid from April 2018.