Just days left before land transaction tax replaces stamp duty in Wales


From 1st April, stamp duty land tax (SDLT) will be replaced by land transaction tax (LTT) in Wales, marking the first new tax in the country for 800 years.

People buying property in Wales will face a new tax system after this weekend as the long-awaited land transaction tax comes into effect, which will see the rates and bands change from the current UK stamp duty levels that still apply in England and Northern Ireland.

Under LTT, any main residential property purchase made up to and including £180,000 will be exempt from taxes, compared to the current £125,000 cut-off point. According to the latest UK House Price Index from January 2018, average homes in Wales sell for £153,034, and around 90% of Welsh property buyers will either be unaffected or be better off after the changes.

Top of the ladder will feel the effects

Those buying higher priced property will be hit the hardest by LTT. At present, homes priced between £400,001 and £925,000 are charged 5% stamp duty, but this will rise to 7.5% LTT for homes costing between £400,001 and £750,000.

Mark Hayward, chief executive of NAEA Propertymark, commented: “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.”

The very top end of the market – properties costing in excess of £1.5m – will remain unaffected with rates staying at 12%, although there are only a relatively small number of such homes available in Wales. Additional rates for second homes will remain at 3%, which is the same as the amount paid in England.

Land transaction tax rates

Current stamp duty rates:

Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5m) 10%
The remaining amount (the portion above £1.5m) 12%

Land transaction tax rates:

Up to £180,000 Zero
The next £70,000 (the portion from £180,001 to £250,000) 3.5%
The next £150,000 (the portion from £250,001 to £400,000) 5%
The next £350,000 (the portion from £400,001 to £750,000) 7.5%
The next £750,000 (the portion from £750,001 to £1.5m) 10%
The remaining amount (the portion above £1.5m) 12%

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Just days left before land transaction tax replaces stamp duty in Wales


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