We welcome the new powers for the Welsh Government to collect Land Transaction Tax (LTT) receipts as it will have a largely positive impact on the region's residential housing sector. 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 our members across the border.
Helping to shape the LTT changes
Mark Hayward gave evidence during a session of the Welsh Assembly’s Finance Committee. He outlined the main challenges in implementing the bill and offered recommendations to ensure it is put into operation effectively. We called 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.
- More guidance when land transactions involve the acquisition of a chargeable interest where the land is partly in Wales and 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
Watch the evidence session
Land Transaction Tax rates and bands
The rates and bands for LTT were announced as part of the Welsh Government's budget by the Cabinet Secretary for Finance and Local Government. Initially, the starting threshold was set at £150,000 but the Welsh Government increased this to £225,000 after the UK Government announced an increase to stamp duty land tax relief in October 2022.
| Property cost | Main residence |
|---|---|
| £0 – £225,000 | 0% |
| £225,001 – £400,000 | 6% |
| £400,001 – £750,000 | 7.5% |
| £750,000 – £1.5m | 10% |
| £1.5m+ | 12% |
Purchases of second homes and buy-to-let property
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 powers in order to increase the supply of homes that Wales so desperately needs.
Additional homes
Buyers purchasing an additional residential property worth £40,000 or more may need to pay the higher residential rates. If replacing a main residence the higher rates may not apply.
| Property cost | Higher residential rate |
|---|---|
| Up to £180,000 | 4% |
| £180,001 – £250,000 | 7.5% |
| £250,001 – £400,000 | 9% |
| £400,001 – £750,000 | 11.5% |
| £750,000 – £1.5m | 14% |
| £1.5m+ | 16% |
Joint ownership
If a home is already owned and buyers decide to jointly buy an additional property with a partner or a friend before selling their main residence, they will likely be liable to pay the higher rate of tax. However, buyers may be able to claim a repayment if the relevant conditions are met.
Calculate the amount of tax you will have to pay using the Welsh Revenue Authority's tax calculator.
Related news and resources
Land Transaction Tax Threshold raised
The Welsh Government has announced the threshold for paying Land Transaction Tax (LTT) is being increased from £180,000 to £225,000 with the change coming into force on 10 October 2022.
Land Transaction Tax: home buyer's information
Propertymark collaborated with the Welsh Revenue Authority (WRA) to produce a downloadable leaflet to support agents in providing potential home buyers with the details regarding Land Transaction Tax (LTT).
Changes to Land Transaction Tax (LTT) rates and bands
The Welsh Government has announced changes to the higher residential rates, non-residential rates and bands, plus the temporary increase to the nil rate band will end on 31 March 2021.