Land transaction tax in Wales

This information only applies in Wales. Purchases of land and property in the UK over a certain value are generally subject to Stamp Duty Land Tax (SDLT). This has been replaced in Wales from 1st April 2018 with a Land Transaction Tax (LTT).

What is the Land Transaction Tax (LTT)?

The LTT is payable upon the purchase or lease of a building or land in Wales over a certain value. It applies to land transactions whose 'effective date' (normally the date of completion) falls on or after 1st April 2018.

What's the difference between LTT and SDLT?

The LTT broadly mirrors the SDLT which it has replaced. However, there are a few differences:

  • There are different rates of tax.
  • LTT contains certain additional rules relating to higher rates of residential property transactions.
  • LTT potentially has a stricter anti-avoidance regime - its 'General Anti-avoidance Rule' (GAAR) applies to 'artificial' tax avoidance whereas SDLT applies to 'abusive' arrangements. LTT also introduces a broad 'Targeted Anti-avoidance Rule' (TAAR) which is applicable to all reliefs.
  • Under LTT the rent element of newly granted residential leases will be exempt from tax (it is chargeable under SDLT).

What is the Welsh Revenue Authority?

The Welsh Revenue Authority (WRA) is responsible for collecting and managing the LTT, as well as other Welsh devolved taxes. Although operationally independent, it is accountable to Welsh Ministers and to the National Assembly for Wales.

What are the main residential LTT rates?

As of April 2018, the LTT threshold stands at £180,000 for residential properties; property which is purchased for less than this price (or is worth less than this amount if it is being transferred in exchange for payment) is not liable for LTT. The current rates (as of April 2018) are as follows:

  • any portion of £180,001 to £250,000 = 3.5%
  • any portion of £250,001 to £400,000 = 5%
  • any portion of £400,001 to £750,000 = 7.5%
  • any portion of £750,001 to £1.5 million = 10%
  • any portion above £1.5 million = 12%

These rates apply both to sales and transfers of freehold property and also to the purchase price of the lease (called the lease premium) in respect of leasehold properties.

What are the higher residential rates?

A higher rate of LTT is normally payable in respect of purchases of additional residential properties; this is usually 3% on top of the main residential rates.

What are the non-residential rates?

As of April 2018, the LTT threshold stands at £150,000 for non-residential properties; property which is purchased for less than this price (or is worth less than this amount if it is being transferred in exchange for payment) is not liable for LTT. The current non-residential rates (as of April 2018) are as follows:

  • any portion of £150,001 to £250,000 = 1%
  • any portion of £250,001 to £1 million = 5%
  • any portion above £1 million = 6%

As with residential property, these rates also apply to sales and transfers of freehold property and to lease premiums of leasehold properties.

For more guidance see Land transaction tax from Gov.Wales. For up-to-date LTT rates and for access to the calculator use the LTT calculator.