Land Transaction Tax replaces Stamp Duty in Wales from April 1


Land Transaction Tax replaces Stamp Duty in Wales from April 1

Wed 14 Mar 2018 by Frances Traynor

House buyers in Wales will pay a new land tax when they buy a property over a certain price from April 1.

The Welsh Government is introducing the Land Transaction Tax (LTT) to replace Stamp Duty Land Tax (SDLT). The LTT will be collected and managed by a new body, the Welsh Revenue Authority (WRA), a department of the Welsh Government.

The new Welsh tax means the UK now has three distinct land tax systems: SDLT continues to apply in England and Wales; property and land buyers in Scotland pay the Land and Buildings Transaction Tax, introduced by the Scottish Government in 2015; and Wales will follow with the LTT on April 1.

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The new land tax rates

The new rates (by percentage of purchase price) that will apply are

0-£180,000 0%
£180,000-£250,000 3.5%
£250,000-£400,000 5%
£400,000-£750,000 7.5%
£750,000-£1.5 million 10%
Over £1.5 million 12%

So, for example, if you buy a house that is valued at £155,000, you will not pay any LTT at all. For a property purchase of £210,000, you’ll pay no LTT on the first £180,000, then 3.5 percent on the remaining £30,000, giving you an LTT bill of £1,050.

First-time buyer exemption won’t apply

In England, first-time buyers were exempted from paying SDLT on the first £300,000 of any transaction in November 2017. The exemption will no longer apply to property transactions in Wales. However, the average price of a first-time buyer purchase in Wales is £135,000, well below the threshold of £180,000, and so most first-time buyers will not pay LTT.

The higher rates of SDLT on additional residential properties, including second homes and buy-to-let properties, will be continued in the LTT. At the moment that supplement is 3 percent on top of the current rates.

When you buy a home in Wales using a solicitor from Homeward Legal’s nationwide panel, your legal professional will no longer file the SDLT form with HMRC but instead lodge a similar form with the WRA. All professionals who act for clients buying land and property in Wales will register an account with the WRA before April 1 to ensure the conveyancing process can be completed smoothly.

Your quote from Homeward Legal will reflect the payment of the Land Transaction Tax when the property or land is based in Wales.