What are the changes to Land Transaction Tax in Wales?
The amount of Land Transaction Tax buyers will pay when buying a home in Wales will change from 10th October.
Land Transaction Tax (LTT) is a tax that’s paid to the government when a buyer completes their house purchase, and it’s calculated based on the cost of the home. LTT replaced Stamp Duty Land Tax (SDLT) in Wales in April 2018.
The finance minister announced on 27th September that the threshold at which home-buyers would start paying LTT payments would be raised from £180,000 to £225,000. According to the Welsh government, this means that 61% of home-buyers will not pay any LTT tax on their home purchase.
For anyone buying a home that costs between £225,000 and £345,000, they’ll also see a reduction in the amount of tax they pay, of up to £1,575.
Any homes costing more than £345,000 – that’s around 15% of the homes in Wales – will see an increase of up to £550.
Land Transaction Tax rates up to 9 October 2022
| Purchase price | Land Transaction Tax rate |
|---|---|
| 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 £1.5m | 10% |
| The portion over £1.5m | 12% |
Land Transaction Tax rates from 10 October 2022
| Purchase price | LTT rate |
|---|---|
| The portion up to and including £225,000 | 0% |
| The portion over £225,000 up to and including £400,000 | 6% |
| The portion over £400,000 up to and including £750,000 | 7.5% |
| The portion over £750,000 up to and including £1.5m | 10% |
| The portion over £1.5m | 12% |
Why are the LTT rates changing in Wales?
The Welsh government had originally planned to make changes to the tax later in 2022, however as a result of the recent changes to stamp duty in England and Northern Ireland, the changes have been brought forward. The adjustments are being made to reflect house price increases in recent years.
READ MORE: What’s happening with interest rates and mortgage deals?
The header image for this article was provided courtesy of Burnett Davies with Easton, Dinas Powys.
