Land Transaction Tax (LTT)

Changes in Wales - April 2018


From 1st April Stamp Duty Land Tax is due to be replaced with “Land Transaction Tax” (LTT) in Wales. LTT is Wales very own tax on property and is set by the Welsh Government.

LTT will operate in a similar fashion to Stamp Duty Land Tax (SDLT) and is calculated based on the “consideration” (generally the price paid) for the land in question. The rates are slightly different to rates in England. A comparison of these are below and are as follows:-

Residential Property Transactions:

Land Transaction Tax Stamp Duty Land Tax
Price Threshold LTT main residential rates Price Threshold SDLT main residential rates
£0- £180,000 0 % First £125,000 0 %
£180,000- £250,000 2.5 % Next – £125,001 – £250,000 2 %
£250,000- £400,000 5 % Next £250,001- £925,000 5 %
£400,000- £750,000 7.5 %  Next £925,001 to £1.5 million  10%
£750,000- £1.5 million 10 % The remaining amount  12%
£1.5million-plus 12 %

 

Non-residential property transactions:

Land Transaction Tax

Stamp Duty Land Tax

Price Threshold Rates Price Threshold Rates
£0- £150,000 0 % £0- £150,000 0 %
£150,000- £250,000 1 % Next £150,001- £250,000 1 %
£250,000- £1 million 5 % Next £250,000 plus 5 %
£1 million-plus 6 %

Non-residential leas rates:

Land Transaction Tax Stamp Duty Land Tax
Net present value of lease thresholds Rates Net present value of lease thresholds Rates
£0- £150,000 0 % £0- £150,000 0 %
£150,000- £2 million 1 % The next £150,000- £5 million 1 %
£2 million plus 2% Next £5 million plus 2%

 

For residential purchases which attract LTT and SDLT, there is an additional 3% charged for individuals who own at least one residential property and are not replacing their main residence.

There are some notable differences between the LTT rates and SDLT rates is that cheaper residential property in Wales will not attract as much tax as the equivalent in England. For non-residential property transactions, the LTT rates are almost identical to SDLT save for purchases in excess of £1,000,000 which attract an additional 1% tax.

Note also First Time Buyers relief will not apply in Wales. First time buyers in England paying less than £300,000 for a residential property will pay no Stamp Duty Land Tax. For first time buyers in England paying between £300,001 – £500,000 the first time buyers will pay Stamp Duty Land tax at a rate of 5% on the amount over £300,000. We have prepared an earlier article on this:-

As part of our work we will assist you with the Stamp Duty Land Tax and Land Transaction Returns. The property law experts at Allington Hughes can help advise you through the process and consider the impacts during the property transaction.

If you wish to discuss this article or any other related matter, please contact Ben Whiting solicitor within our Conveyancing department on Wrexham 01978 291000. Alternatively, email [email protected]