Are you up to speed with the new 'Stamp Duty' rates in Wales

When you buy a property it will sometimes be subject to a property tax.  This was previously known as Stamp Duty Land Tax (STLD) (and it still is in England).  However, since 1st April 2018, in Wales it is now known as Land Transaction Tax (LTT) and there are new rates which you need to be aware of.   


When you buy a property in Wales now, the LTT you pay is calculated by a percentage of the purchase price as follows;

0 - £180,000


£180,000 - £250,000


£250,000 - £400,000


£400,000 - £750,000


£750,000 - £1.5 million


Over £1.5 million



For example; if you buy a house for £145,000 you would pay no LTT.  If you purchased a property at £210,000, you would pay no LTT on the first £180,000 of that amount.  You would then pay 3.5% on the balance of the purchase price over £180,000 (but under £250,000), in this case £210,000 - £80,000 = £30,000.  You would, therefore, pay 3.5% on £30,000 = £1,050 LTT payable within 28 days of completion of the sale.


However, if you intend to buy a second home (this includes buying property as an investment, to rent out etc), you may be liable for an additional surcharge of 3% on top of the current rates as stated above. For example, buying a second home at £100,000 would cost you £3,000 in LLT.  However, buying a second home at £210,000 would render an LTT bill of £7,350 (3% on £180,000) = £5,400 + (6.5% of the remaining £30,000) = £1,950 = £7,350 payable on completion of the sale. 


If in the event you sell your main residence and purchase another main residence, the higher LTT rate (the extra 3%) does not apply.


Properties in England have their own rates, as do those with commercial or leasehold use.  You also need to be aware that when buying a property which has, even a small element of agricultural land or buildings, this could be regarded as mixed use and reduce the tax liability.


Furthermore, if land or property is on either side of the boundary of England and Wales, you can choose to either pay under the STLD or LTT regimes meaning you can choose a lower tax liability.


So, how to summarise?  Generally, buying at the lower end of the market may result in a lower tax bill compared to the previous rates, but the new rates may find you paying more than you previously would have, if you are buying at the top end of the market. 


Buying a property?  Follow the link to our online calculator to find out how much tax you’d pay


Kathryn A Evans BSc (Hons) MRICS IRRV