Land Transaction Tax now in force in Wales

As of 1 April 2018, SDLT will no longer apply to properties in Wales. A new property tax system has been brought in known as the Land Transaction Tax (LTT). This operates in broadly the same way as for SDLT but returns and payments are made direct to the Welsh Revenue Authority rather than HMRC.

The rates for residential properties are as follow:

The portion up to and including £180,000: 0%

The portion over £180,000 up to and including £250,000: 3.5%

The portion over £250,000 up to and including £400,000: 5%

The portion over £400,000 up to and including £750,000: 7.5%

The portion over £750,000 up to and including £1,500,000: 10%

The portion over £1,500,000: 12%

The rates for non-residential or mixed use properties are as follow:

The portion up to and including £150,000: 0%

The portion over £150,000 up to and including £250,000: 1%

The portion over £250,000 up to and including £1,000,000: 5%

The portion over £1,000,000: 6%

There are special rules applicable to properties that straddle the border between England and Wales, and certain other changes from the SDLT regime, including no first-time buyer relief for residential properties.

The main basis of income tax-style bands, 3% additional rate for second homes and applications to residential and non-residential or mixed use properties remain broadly unaltered.

The penalties for late filing of returns and late payment of tax due are now also different for LTT and are generally harsher than for SDLT.  

If you have any queries please contact Pierre Bell. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.