Land Transaction Tax

Land Transaction Tax – all change for Wales

From 1st April 2018 Land Transaction Tax (LTT) has replaced Stamp Duty Land Tax...

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Land Transaction Tax – all change for Wales

23rd April 2018

News : Residential Property

From 1st April 2018 Land Transaction Tax (LTT) has replaced Stamp Duty Land Tax (SDLT) in Wales.

Like SDLT, LTT will be payable when you buy or lease a building or land over a certain price. All parties involved may be affected and it is important to be aware of the changes that have been made.

What has changed?

In essence, LTT is broadly consistent with SDLT. However, it is prudent that parties to Welsh transactions are aware of the reasons the Welsh Government have implemented the changes. These are to:-

  • simplify the tax and make it fairer
  • improve its efficiency and effectiveness
  • focus on Welsh needs and priorities

The bill received Royal Assent on 24 May 2017 and came into force on 1 April 2018, meaning any property transactions completed from that date in Wales must have a LTT Return completed and filed with the Welsh Revenue Authority who will be responsible for collecting the tax.

Land Transaction Tax bands

LTT bands for residential properties are detailed below:-

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The Welsh Government has focused the assistance that LTT will have on first time buyers. They believe the buyers of lower value properties will pay less LTT compared to SDLT, while the buyers of more expensive properties will pay in some cases substantially more LTT then SDLT.

It is important to note that purchasers of additional residential property and purchases by a company will be subject to an additional rate of LTT of 3% which is in line with the current rates of SDLT.

An LTT calculator is available on the Welsh Revenue Authority website:-

https://beta.gov.wales/land-transaction-tax-calculator

For further information about the new tax, please visit the following website:-

http://gov.wales/funding/fiscal-reform/welsh-taxes/land-transaction-tax/?lang=en

The changes in both SDLT and LTT recently can make it feel like a minefield when considering your property purchase. If you have any questions or concerns, please contact a member of the Conveyancing Team on 0800 389 7093 who will be happy to assist with your query.

 

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