Wales to introduce its own version of Stamp Duty Land Tax

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From April 2018 Wales will introduce Land Transaction Tax (LTT) its own version of Stamp Duty Land Tax (SDLT).

It is the first Welsh-only tax in almost 800 years.

Stamp Duty Land Tax (SDLT) is payable when you buy or lease a building or land over a certain price; the rate of tax due is calculated using a banding system.

Land Transaction Tax (LTT) uses the same banding system, however, instead of separating into residential and non-residential properties - LTT calculates tax owed based on residential banding only.

The Welsh Government has announced that nine out of 10 buyers will pay the same or less than they do at the moment; buyers of homes worth under £250,000 will pay £500 less in LTT, those buying up to £150,000 will pay no tax at all.

However, those one in 10 buyers will be paying thousands more than people in England, for example: LTT on a £750,000 house will cost £36,250 compared to Stamp Duty in England of £27,500.

The current rates*

  • Up to £125,000 no tax
  • Between £125k and £250k 2%
  • Between £250k and £925k 5%
  • Between £925k to £1.5m 10%
  • Above £1.5m 12%

The new rates in Wales (NB these rates relate to purchases, lease premiums or transfer values)*

  • Up to £150k no tax
  • Between £150k and £250k  2%
  • Between £250k and £400k 5%
  • Between £400k and £750k 7.5%
  • Between £750k to £1.5m 10%
  • Above £1.5m 12%

“Overall this is good news for buyers in Wales, but there will be some big winners and losers,” said Peter Way-Rider, tax manager at Ellis & Co.

“Some buyers will escape the tax bill completely, whereas the higher end buyers will end up paying more than those over the border.”

During last week’s Autumn Budget (2017) Stamp Duty Land Tax was abolished for first time buyers on homes under £300,000.

For further information about this or any other tax matter contact Peter on 01244 343504.

*www.gov.wales