Helping you understand Income protection better.
Land Transaction Tax (LTT) has now replaced STAMP DUTYin Wales.
Land Transaction Tax in Wales
In October 2017 the Welsh Government announced the new LTT system and the new budget started in April 2018.
If you buy or lease a building or land over a certain price you are liable to pay LTT. The new system is loosely consistent with the existing SDLT structure in England and Northern Ireland.
The new changes have been put into place so they can focus on Welsh needs and priorities, it will improve taxation effectiveness and makes the new tax fairer.
LTT Rates in Wales
LTT is broadly based on SDLT where buyers will pay tax on amounts between bands and not the full purchase price.
What are the new LTT rates in Wales?
The current rates are shown below:
|Tax Band||Normal Rate||Additional Property|
|less than £180k||0%||3%*|
|£180k to £250k||3.5%||6.5%|
|£250k to £400k||5%||8%|
|£400k to £750k||7.5%||10.5%|
|£750k to £1.5m||10%||13%|
|rest over £1.5m||12%||15%|
|* Under the new LTT structure an additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £180k the LTT rate will be 3% on full purchase price.|
When purchasing a property Land Transaction Tax is exempt on the first £180,000. 3.5% is paid when the price falls between £180,000 and £250,000 band. The portion between £250,000 and £400,000 is 5%. 7.5% will be paid on the portion within £400,000 and £750,000, within the next band is 10% up to 1.5 million and 12% will be paid over that.
If you purchase an additional property, like a second home or buy to let there will be a 3% surcharge applied to all the bands.
LTT for additional properties
Additional properties are second homes and buy to let’s. Like the rest of the UK, the surcharge will apply to the full price above an initial threshold of £40,000.
Please be aware that the new LTT system has a 3% surcharge that is applied to all transactions involving a purchase of an additional property.
First-time buyers and LTT
The first-time buyer threshold is placed at £180,000 and this should make sure that most first-time buyers will not pay LTT on their first home. Unfortunately, the new LTT system doesn’t have first-time buyer relief.
How much LTT will I need to pay?
If you have a look at the calculator below it will give you an indication of how much tax will be payable for both single and additional freehold residential property that is purchased within Wales.