Land Transaction Tax - Wales

Blue and Red Doors

“Today, the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill and Explanatory Memorandum, has been laid before the National Assembly for Wales. The Bill will establish a new tax on land transactions, which will replace stamp duty land tax in Wales from April 2018.” 

Mark Drakeford, Cabinet Secretary for Finance and Local Government
12 September 2016

What Did We Say?

From April 2018, Land Transaction Tax (LTT) will replace UK Stamp Duty Land Tax (SDLT) in Wales.

“The National Association of Estate Agents (NAEA) welcomes the new powers for the Welsh Government to collect Land Transaction Tax (LTT) receipts, as it will have a largely positive impact on the residential housing sector in the region. The introduction of the new initiative will create a fairer system and in turn increase the desirability of Welsh property.

“While, in the longer term, it may lead to an increase in house prices as demand rises, it will increase revenue for the Welsh Government which can be used to regenerate communities across the region. It will also ensure that the Welsh residential market remains healthy, which will be a boost to NAEA’s members across the border.”

Mark Hayward

Mark Hayward

Chief Executive

Shaping the Changes

NAEA Propertymark attended a stakeholder roundtable discussion event with Assembly Members in September and responded to the Welsh Assembly’s Finance Committee inquiryinto LTT in October 2016. 

Read the response

NAEA Propertymark Chief Executive Mark Hayward also gave evidence during a session of the Finance Committee, outlining the main challenges in implementing the Bill and offering recommendations to ensure it is put into operation effectively.

Calling for

  • Tax bands and rates more suited to the value of property in Wales in comparison to England and Scotland.
  • Replicate SDLT processes and systems to provide stability and ensure that procedures used to collect and manage the tax continue to be understood. 
  • Further guidance for when land transactions involve the acquisition of a chargeable interest where the land is partly in Wales and partly in England.
  • Wide reaching communication so people understand LTT is a replacement tax and not an additional one.
  • Retain current reliefs and exemptions under SDLT. 
  • Online calculators and guidance for the sector.    

Higher Rates of SDLT

Higher rates of Stamp Duty Land Tax on purchases of additional residential properties (including second homes) in Wales came into effect on 1 April 2016. These will continue under LTT.  

In August 2016 NAEA Propertymark responded to the Welsh Government’s plans in a joint statement with ARLA Propertymark and said:

“We are disappointed that the Welsh Government has decided to take this decision and followed the rest of the UK in implementing this punitive regime for Buy to Let landlords. We have been highly supportive of the new devolved tax regime in Wales precisely because it was a way that it could set its own tax agenda that works best for the housing sector in the region. In continuing with the surcharge, the Welsh Government is not making the most of its new powers in order to increase the supply of homes that Wales so desperately needs.”

Welsh Revenue Authority (WRA)

The WRA will undertake all the collection and management functions for LTT from April 2018. The WRA will be responsible for developing guidance to assist taxpayers, and their agents, in complying with their obligations. This will be available online before LTT goes live in April 2018.

LTT Rates and Bands

The new rates and bands for LTT were announced as part of the Welsh Government's Budget by the Cabinet Secretary for Finance and Local Government. Under the new rates Wales will have the highest starting threshold for the property tax in the UK of £150,000. NAEA Propertymark called for the thresholds to be higher and we are pleased with the lower bands which will benefit the market once introduced on 1 April 2018.

See the new rates

After the announcement of the new LTT rates for Wales, Mark Hayward commented:

“This is a welcome move for the Welsh housing market and we’re pleased the Welsh Government has listened to our proposals to raise the band for this lower rate. The rate up to which buyers won’t have to pay any stamp duty will be £150,000 from 2017 – the same value as the average house price in Wales. This means a huge number of house buyers will no longer have to pay any stamp duty at all. However, the move creates further bands for properties in excess of £250,000, and those properties will now attract a higher rate of stamp duty land tax than they would have previously.”