Land Transaction Tax - everything you need to know

If you’re buying a home in Wales you will pay a reduced rate of Land Transaction Tax (LTT) until 30 June 2021. If you’re buying your main home, you will pay no LTT on purchases under £250,000. If you’re buying an additional property, you will need to pay the higher residential rates for each band.

What is Land Transaction Tax?

Land Transaction Tax (LTT) is a tax you might have to pay if you buy a residential property or piece of land in Wales.

If you’re buying your main property up until 30 June 2021, you will pay no LTT on properties costing up to £250,000. This will apply if you’re a first-time buyer and if you’ve owned a property before.

Properties costing more than £250,000 will pay LTT based on the value of the property.

From 1 July 2021, you will not have to pay LTT on properties costing up to £180,000.

If you’re buying a second home, you’ll pay the higher residential rates of LTT on properties costing more than £40,000.

This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.

How much is Land Transaction Tax?

There are several rate bands for Land Transaction Tax (LTT).

The tax is calculated on the part of the property purchase price falling within each band.

For example, if you buy a house for £300,000, the LTT you owe is calculated as follows:

0% on the first £250,000 = £0

5% on the next £50,000 = £2,500

Total LTT = £2,500

Land Transaction Tax (LTT) rates

Minimum property purchase price
Maximum property purchase price
Stamp Duty rate (only applies to the part of the property price falling within each band)

£0

£250,000

0%

£250,001

£400,000

5%

£400,001

£750,000

7.5%

£750,001

£1,500,000

10%

Over £1,500,000

12%

Land Transaction Tax (LTT) rates from 1 July 2021

Minimum property purchase price
Maximum property purchase price
Stamp Duty rate

£0

£180,000

0%

£180,001

£250,000

3.5%

£250,001

£400,000

5%

£400,001

£750,000

7.5%

£750,001

£1.5 million

10%

Over £1.5 million

12%

Land Transaction Tax on second homes

Buyers of additional residential properties, such as second homes and some buy-to-let properties, will have to pay the higher residential rates of Land Transaction Tax (LTT) on properties costing more than £40,000.

Minimum property purchase price
Maximum property purchase price
Stamp Duty rate (only applies to the part of the property price falling within each band)

£0

£180,000

4%

£180,001

£250,000

7.5%

£250,001

£400,000

9%

£400,001

£750,000

11.5%

£750,001

£1,500,000

14%

Over £1,500,000

16%

When do you have to pay Land Transaction Tax?

You’ll need to submit a Land Transaction Tax (LTT) return and pay what you owe to the Welsh Revenue Authority within 30 days of the day after completion (or other effective date of the transaction).

If you don’t submit a return and pay the tax, Welsh Revenue Authority might charge you penalties and interest.

How to pay Land Transaction Tax

Usually your solicitor will deal with the Land and Transaction Tax (LTT) return, although you can do it yourself.

Either way, you’re responsible for making sure it’s all submitted on time.

If the price of your new home is under £250,000, you must still submit a return (unless exempt) even though you won’t need to pay any LTT.

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