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Prior to 1st April 2018 Stamp Duty Land Tax (SDLT) was payable on all land or property over a certain threshold in England and Wales.
As of 1st April, Welsh properties are instead subject to Land Transaction Tax (LTT).
We will guide you through the key changes:
The LTT thresholds for residential properties and rates are set out below:
Up to and including £180,000 – 0%
portion from £180,000 to £250,000 - 3.5%
portion from £250,000 to £400,000 - 5%
portion from £400,000 to £750,000 - 7.5%
portion from £750,000 to £1,500,000 - 10%
portion over £1,500,000 - 12%
So, if you buy a house for £200,000, you do not pay LTT on the first £180,000. Tax is then calculated at 3.5% of the remaining £20,000.
LTT is not payable on the first £180,000 of a purchase compared to £125,000 under SDLT rules.
The threshold for purchase prices (or a portion of) between £400,000 and £950,000 is higher under LTT - 7.5% to 10%. For SDLT, there is one band for portions between £250,000 to £925,000 which is a flat rate of 5%.
There is no LTT relief available for first time buyers like there is under the SDLT rules. However, the increased 0% band will hopefully make getting on the housing ladder a little easier.
LTT takes effect from 1st April. If your purchase completed prior to 1st April, SDLT will be payable in the usual way. After 1st April, all properties in Wales are subject to LTT.
Second properties in Wales will attract a 3% surcharge for LTT, the same as under the SDLT rules.
Myerson deal with a wide range of property transactions across England and Wales. If you would like further information and tailored quote please get in touch with our specialist Residential Property solicitors on 0161 941 4000 or email email@example.com.