Table of Contents
- LTT Calculator – Land Transaction Tax in Wales
- Stamp Duty in Wales
- LTT Property Tax Bands in Wales
- What Are The Rates Of Stamp Duty In Wales?
- Stamp Duty in Wales (LTT) FAQ
- How Much Is Stamp Duty In Wales?
- Why Is Stamp Duty Different In Wales?
- Is Stamp Duty In Wales Higher For A Second Property?
- Can I Avoid Paying Land Transaction Tax In Wales?
- When Is Land Transaction Tax Due?
- Land Transaction Tax On Non Residential Properties
- LTT Stamp Duty In Wales
LTT Calculator – Land Transaction Tax in Wales
Stamp duty in Wales is called Land Transaction Tax
LTT or Land Transaction Tax is the new name of stamp duty in Wales. This property tax was introduced in April 2018 and the money generated from LTT in Wales is used to help support public services throughout Wales. Formerly the equivalent tax was known as stamp duty in Wales.
Use our Wales LTT calculator below to find out how much Land Transaction Tax you need to pay on your property. Our LTT calculator is for guidance purposes only, please seek advice from the local authorities in Wales or from a professional adviser to calculate the exact amount of LTT which will apply to your property transaction.
Below the LTT calculator we have listed some of your most common questions about stamp duty in Wales (LTT) and other key information you need to know before buying or selling a property in Wales
LTT Calculator For Wales
Stamp Duty in Wales
The new name for stamp duty in Wales is Land Transaction Tax or LTT
Stamp duty in Wales is now known as Land Transaction Tax, or LTT for short. If you purchase a house in Wales or land over a certain value, you must pay LTT to the authorities in Wales. There are two property price thresholds at which you must begin paying this Welsh stamp duty. They are as follows (Correct as of July 2020 as stated by the Welsh Government):
- £250,000 for residential properties in Wales*
- £150,000 for non-residential properties and land
* This rate is temporary until 31st March 2021
If you need to find out about stamp duty in Wales before March 31st 2018 (the day before LTT was introduced) then you should contact the HMRC with your enquiry.
When did stamp duty in Wales end?
Stamp duty in Wales ended officially on 31st March 2018 and was replaced by Land Transaction Tax on 1st of April, 2018. This new property tax is easier to calculate and more straightforward than the older system of stamp duty for properties in Wales.
LTT Property Tax Bands in Wales
Land Transaction Tax in Wales is calculated in bands depending on the value of your property. You will pay in increments if is applicable to your property price. Using the table below you can see LTT rates in Wales.
You may pay more than one band if that applies to your property. For example, if you bought your house for £275,000, you would pay 3.5% on the portion from £180,000 – £250,000, then 5% on the rest over £250,000. If this seems confusing don’t worry, our LTT calculator above makes it easy for you to calculate the amount of property tax you must pay on your property in Wales.
What Are The Rates Of Stamp Duty In Wales?
When the new Land Transaction Tax in Wales was applied in 2018 the bands and rates of stamp duty in Wales were between 0% and 12%. Buyers of properties valued at under £180,000 paid no tax. Between £180,000 and £250,000 the tax was 3.5%. properties valued between £250,001 and £400,000 were charged at 5%. The highest rate applied was 12% and this was for properties valued at over £1.5 million.
The rates that applied were designed to ensure that 65% of buyers were liable for zero tax. In addition, the Welsh finance secretary stated that the burden of tax for 24,000 home buyers would be reduced and this included average buyers as well as first time buyers.
In July 2020 the rates for Land Transaction Tax were temporarily reduced until 31 March 2021. The threshold for 0% was increased to £250,000 whilst the other bands remained the same.
LTT Tax Bands in Wales
Residential LTT rates in Wales until March 31st 2021
|Property Price||LTT Tax Rate|
|Up to and including £180,000||0%|
|From over £180,000 up to and inc. £250,000||0%|
|From over £250,000 up to and inc. £400,000||5%|
|From over £400,000 up to and inc. £750,000||7.5%|
|From over £750,000 up to and inc. £1,500,000||10%|
|From over £1,500,000||12%|
Important: These rates may change after March 31st 2021
Stamp Duty in Wales (LTT) FAQ
How much is stamp duty in Wales?
Stamp duty in Wales was replaced with Land Transaction Tax on 1st of April 2018. It is calculated in bands depending on the price of your property. Use our LTT calculator above to get a guide for the amount of LTT you will have to pay. If you need to find out more about stamp duty in Wales prior to March 31st 2018, contact HMRC.
What Is Land Transaction Tax in Wales?
LTT or Land Transaction Tax is a tax levied on property sales in Wales. The money raised from LTT helps fund public spending and projects in Wales. You can see the bands for the different property tax rates by looking at the table above.
Do I have to pay stamp duty in Wales?
Stamp duty in Wales no longer applies to property sales since it was replaced by Land Transaction Tax on 1st of April 2018. If you are in doubt whether LTT applies to your own property purchase, consult the calculator above and contact the relevant local authority in the area of Wales you have purchased your property. The rates were designed to assist first time buyers who were purchasing lower priced properties. The majority of buyers in Wales were helped by this change with only around 6% of buyers paying more due to the changes.
Do I pay more Land Transaction Tax for a second home in Wales?
The short answer is yes. If you use our LTT calculator above, tick the box which asks if you are purchasing a second home. You will then see the approximate rate you will have to pay for your property purchase.
How Much Stamp Duty Will I Pay In Wales?
The threshold for Land Transaction Tax is currently £250,000. There are several rates applied to property purchases. The first band for property valued above £250,000 is charged at 5%. This means that on a property valued at £300,000 you pay 0% on the first £250,000 and 5% on the remaining £50,000.
Is Stamp Duty Payable On Woodland?
Stamp duty in Wales or Land and Transaction Tax (LTT) is payable on both land and property. The value of the land determines the amount of tax payable and this must be submitted within 30 days of the completion of sale of the property in question.
How Much Is Stamp Duty In Wales?
Anyone buying a property in the UK may be required to pay stamp duty in Wales if the price of the property is above the threshold set by the government. Until 2018 Stamp Duty in Wales was the same as in England but changes made by the Welsh government mean that now the payment is known as the Land Transaction Tax. This is different to stamp duty payable in England or Scotland.
Use the LTT calculator above to work out your stamp duty in Wales
The rules regarding Land Transaction Tax require a fee to be paid for both freehold and leasehold property or land and there are several bands that can be applied. Below we have listed some of the most common questions about the LTT in Wales which will help you to navigate through the system when you decide to buy a property in Wales.
Why Is Stamp Duty Different In Wales?
Up until March 2018 stamp duty in Wales was put into effect under the same system as that charged in England. The devolved Welsh government decided to implement a different system and introduced the Land Transaction Tax.
The changes made by the government within this new system were designed to focus on the priorities and needs of the Welsh people. They were also aimed at making the system fairer and to simplify the property tax system.
The changes under the new property tax in Wales meant that first time property buyers would no longer be able to benefit from the £300,000 threshold that applied to England. Instead the threshold was reduced to £180,000.
However, as the average price of a home in 2018 for first time buyers in Wales was £135,000, this change meant that most people would be totally exempt from the new taxation.
Is Stamp Duty In Wales Higher For A Second Property?
Rates of Land Transaction Tax in Wales are higher for anyone buying a second home or a buy-to-let property. The charges are 3% more than the rate on a main residential house. For second homes, properties that cost below £40,000 are exempt from the extra tax.
Additionally, tax levied on second homes can be refunded if you sell your main residence and the new property becomes your main residence within 36 months of the purchase.
The exception to the extra tax is for first time buyers who are purchasing a buy-to-let property. These buyers are exempt from the extra 3% tax and these rules are in place until 1st April 2021.
|Buy to let property in Wales|
|Buying property to let? Get your legal tenancy agreement for England and Wales|
Can I Avoid Paying Land Transaction Tax In Wales?
The only legal way to avoid paying the Land Transaction Tax or stamp duty in Wales is to pay less than the threshold price for the property. However, if you are in the process of divorcing or separating and you are receiving a portion of the property as part of a settlement there will be no Land Transaction Tax to pay. This does not apply to unmarried joint owners.
Similarly, if you receive a property under the terms of a will there is no need to advise the Revenue authority. Even if there is an outstanding mortgage, the Land Transaction Tax will not apply to beneficiaries who have been left property under a will.
Property that is gifted is slightly different. There is no tax payable as long as there is no outstanding mortgage. If the owner making the gift still has money owed to a lender, you will be responsible for paying tax on the mortgage value if it exceeds the threshold.
You cannot exchange properties with another person without being subject to Land Transaction Tax in Wales.
When Is Land Transaction Tax Due?
Once you have completed on your property purchase in Wales you must pay LTT within 30 days. Although this may be arranged by your solicitor or legal adviser, it is your personal responsibility to ensure that the tax return is submitted within the deadline.
You can submit the paperwork yourself by using a paper return which is available online. Even if the price of the property lies below the threshold a tax return must still be completed and submitted although no tax will be charged.
Land Transaction Tax On Non Residential Properties
You can find the rates of LTT at the Welsh Revenue Authority website. Rates for non-residential property include both leasehold and freehold houses, shops, offices and for agricultural land. Up to the threshold of £150,000 there is no tax payable. Between 150,000 and £250,000 the rate is 1%. Currently the highest rate is 6% for non-residential property priced over £1 million.
LTT Stamp Duty In Wales
Further information about stamp duty in Wales can be accessed by conferring with the solicitor who is handling your property purchase. Before you buy a property in Wales you should be aware of all your tax liabilities and the rates of stamp duty in Wales the property will be subject to. You can refer back to our LTT calculator at any time for guidance on property tax in Wales.