Land Transaction Tax
Land Transaction Tax (LTT) is the tax you pay when you purchase property in Wales. At AHACCOUNTANTS, we’re here to guide you through the details and help you navigate this tax, even if you’re based in Nottingham and looking to make a property purchase in Wales.
Who Pays the Tax?
If you’re buying either residential or commercial property in Wales, you’ll be responsible for paying LTT. In comparison, Stamp Duty Land Tax (SDLT) applies if you’re buying property in England or Northern Ireland, and Land and Buildings Transaction Tax (LBTT) applies for properties in Scotland.
What Counts as a Land Transaction?
A land transaction can be anything from buying a house, taking out a lease, or even assigning a lease. Essentially, if you’re acquiring an interest in land, LTT may come into play.
LTT is managed by the Welsh Revenue Authority (WRA), and it’s your responsibility to file an LTT return and pay the tax when it’s due.
When Do You Need to Pay LTT?
Once your property transaction is completed, you’ll have 30 days to file an LTT return and pay the tax to the WRA. If this isn’t done within the timeframe, penalties and interest could apply.
Some property transactions are exempt from paying LTT or submitting a return, such as:
- No money changing hands.
- Property transfers due to inheritance or divorce.
- Purchases of freehold properties below £40,000.
- Some specific lease agreements.
Properties on the England-Wales Border
For homes that straddle both countries, the tax is split: you’ll pay SDLT for the English side of the property and LTT for the Welsh side.
How Much Tax Will You Pay?
For residential properties purchased after 10 October 2022, here are the rates:
| Property Price | LTT Rate (%) |
| £0 – £225,000 | 0 |
| £225,001 – £400,000 | 6 |
| £400,001 – £750,000 | 7.5 |
| £750,001 – £1,500,000 | 10 |
| Over £1,500,000 | 12 |
For non-residential properties bought after 22 December 2020, the rates are:
| Property Price | LTT Rate (%) |
| £0 – £225,000 | 0 |
| £225,001 – £250,000 | 1 |
| £250,001 – £1,000,000 | 5 |
| Over £1,000,000 | 6 |
Buying a Second Property or an Investment Property?
If you’re purchasing an additional home or investment property (such as a buy-to-let), you’ll pay higher rates, starting from 4% on properties up to £180,000 and increasing on higher-priced properties.
| Property Price | LTT Rate (%) |
| £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 |
What About First-Time Buyers?
Unlike in England and Scotland, Wales doesn’t offer any tax relief for first-time buyers under LTT. However, there are other ways to plan for this, and we can help with that!
How We Can Help
Planning to buy property in Wales but feeling overwhelmed by the tax rules? AHACCOUNTANTS is here to simplify things for you. Whether you’re purchasing a home, an investment property, or navigating cross-border transactions, we can offer clear, expert advice to help you make the best decisions.
Give us a call today and let’s chat about how we can help you!