Land Transaction Tax in Wales

Land Transaction Tax (LTT) replaced Stamp Duty Land Tax (SDLT) in Wales from April 2018. It is the levy all buyers must pay when purchasing a property over £180,000. Land tax in Wales (like in the rest of the UK) is calculated on a percentage basis although the thresholds are slightly different. In Wales, buyers purchasing an additional residential property over £40,000 will incur a three per cent surcharge. When the legislation was first developed, we played a key role in lobbying for tax bands better suited to the value of property in Wales.

Mark Hayward

Mark Hayward
NAEA Propertymark Chief Executive

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'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'.

NAEA Propertymark helping to shape the changes

Mark Hayward, NAEA Propertymark Chief Executive, 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's 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

Higher Rates of SDLT on purchases of additional residential properties (including second homes) will continue under LTT

'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'.

Full response

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 £180,000 after the UK Government announced stamp duty land tax relief for first-time buyers in the 2017 Autumn Budget.

Through our lobbying, we called for a higher starting threshold and are pleased that the lower bands will benefit the market. However, LTT creates further bands for properties in excess of £250,000 and these properties will now attract a higher rate of stamp duty land tax than they would have done previously.

CONFIRMED RATES AND BANDS FROM 1 APRIL 2018

Purchase price

Stamp Duty

£0–£180,000

0%

£180,001–£250,000

3.5%

£250,001£400,000

5%

£400,001£750,000

7.5%

£750,001£1.5m

10%

£1.5m+

12%

Calculator

Calculate Land Transaction Tax

Calculate the amount of tax you will have to pay using the Welsh Revenue Authority's tax calculator. Calculate...