Land Transaction Tax (LTT): Stamp Duty in Wales
In Wales, Stamp Duty is called Land Transaction Tax or LTT for short.
LTT is a tax payable when you buy or take a leasehold on property and land in Wales.
Wales used to have the same Stamp Duty system as the rest of the UK but it brought in its own system as from April 2018. Although the basic concept of Land Transaction Tax is the same as Stamp Duty – it is a tax on buying property – both the way it works and the rates of tax are different.
The LTT system in Wales, plus the fact that average property prices in Wales are lower – currently the average property price in Wales is £163,768 – means that many house buyers in Wales don’t actually pay LTT.
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Land Transaction Tax – Useful Statistics
In 2018-19 there were a total of 61,750 property transactions which generated £229.6 million in LTT.
55,660 of these were residential transactions generating £154.5 million in LTT.
£59.1 million of LTT revenue was raised from the higher rate of Land Transaction Tax.
The average LTT paid was the highest in Monmouthshire at £6,640 per transaction.
37% of all residential transactions paid the higher rate of LTT in Gwynedd, but in Torfaen, it was only 16%.
Source: Welsh Revenue Authority
Current LTT Rates in Wales
LTT in Wales is only charged when you pay over £180,000 for a residential property. If you are buying non-residential land or property LTT applies for purchases over £150,000.
The main rate of LTT is charged at the relevant percentage rate on the amount of the purchase which falls within each band. The main rates of LTT are as follows: Property Value: SDLT Rate Up to and including £180,000 0% Over £180,000 (Up to and including £250,000) 3.5% Over £250,000 (Up to and including £400,000) 5% Over £400,000 (Up to and including £750,000) 7.5% Over £750,000 (Up to and including £1,500,000) 10% Over £1,500,000 12%
So, for example, if you buy a house in Wales for £280,000 the LTT you owe is:
0% for the first £180,000
3.5% for the next £70,000
5% for the next £30,000
Total LTT = £3,950
But, the easiest way to find out how much LTT you might have to pay is to use a Land Transaction Tax Calculator.
LTT For Buy To Let And Second Homes
If you are buying a property and you already own one or more residential properties then you have to pay the higher rate of LTT.
The higher rates of LTT are as follows: Property Value: SDLT Rate Up to and including £180,000 3% Over £180,000 (Up to and including £250,000) 6.5% Over £250,000 (Up to and including £400,000) 8% Over £400,000 (Up to and including £750,000) 10.5% Over £750,000 (Up to and including £1,500,000) 13% Over £1,500,000 15%
The higher rates of LTT only apply if the property you are buying costs over £40,000.
If you are buying a property as a company, or as a trust, you also have to pay the higher residential rate of LTT in Wales.Back to Content
LTT For First Time Buyers
First time buyers in Wales are not given any relief from LTT. The Welsh system is different to Stamp Duty in England and LBTT in Scotland where first time buyers are eligible for reduced tax.
This is probably because the LTT threshold is lower in Wales and also the fact that average property pieces in Wales are lower than in England. The Welsh Government say that most first time buyers do not pay LTT anyway.Back to Content
Other Rates Of LTT: Non Residential Property
If you are buying a non-residential property in Wales such as a shop, office or agricultural land the rates of LTT are as follows: Property Value: SDLT Rate Up to and including £150,000 0% Over £150,000 (Up to and including £250,000) 1% Over £250,000 (Up to and including £1,000,000) 5% Over £1,000,000 6%
When Are You Entitled To A LTT Refund?
If you buy a new home before selling your old home you will usually need to pay the higher rates of LTT on the new home since you already own a property. However, if you sell your old home within three years you can claim a refund of the higher rate of LTT paid. This refund will be the difference between the higher rate paid and the main rate amount that would have applied to your new home.Back to Content
When Do You Pay LTT?
If you use a solicitor or conveyancer to buy your house in Wales they will file the Land Transaction Tax Return for you and pay any LTT due on your behalf to the Welsh Revenue Authority (WRA). LTT must be paid within 30 days of the completion of the purchase.
Changes To LTT
The tax rates and bands for Land Transaction Tax are set by the Welsh Government and approved by the National Assembly for Wales.
LTT in Wales may be changed in future if the Stamp Duty system in England is also changed. The Welsh Government may well mirror any changes to Stamp Duty in England, although they do not have to.
For this reason it is always important to make sure you are using the latest version of a good Land Transaction Tax Calculator to calculate your LTT.Back to Content
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