Temporary cut to the Land Transaction Tax in Wales

Following temporary changes to Stamp Duty Land Tax rates in England and Northern Ireland and Scotland's Land and Buildings Transaction Tax, the Welsh Government announced on the 14th July a temporary increase to the nil rate band of Land Transaction Tax for residential property transactions in Wales. 

The temporary cut applies from 27th July to 31st March 2021 and means the nil rate band for main rate transactions will increase from £180,000 to £250,000, all transactions that complete before then should use the current rates and bands.

The tax paid for higher rate residential or non-residential transactions are unchanged. 

This is an important difference because it means that unlike England, Northern Ireland and Scotland, the increase in the nil rate band will not benefit residential landlords. This can be seen on the below LTT tables: 

Price Threshold	Main Residential Rate
The portion up to and including £250,000	0%
The portion over £250,000 up to and including £400,000	5%
The portion over £400,000 up to and including £750,000	7.5%
The portion over £750,000 up to and including £1,500,000	10%
The portion over £1,500,000	12%
Price Threshold	Higher Residential Rate
The portion up to and including £180,000	3%
The portion over £180,000 up to and including £250,000	6.5%
The portion over £250,000 up to and including £400,000	8%
The portion over £400,000 up to and including £750,000	10.5%
The portion over £750,000 up to and including £1,500,000	13%
The portion over £1,500,000	15%

 

 

 

 

 

 

 

 

 

 

Wales' Finance Minister Rebecca Evans said: “We have worked quickly to identify what, if any, change we should make to Land Transaction Tax to meet the needs of the Welsh economy and the housing market in Wales. 

“Our goal has been to ensure the fairest balance between lifting the threshold to help encourage growth whilst also to provide funding for the urgent pressures affecting so many people in this crisis. 

“The new threshold will mean that no tax will be paid on around 80% of transactions in Wales where the main residential rates apply. With a higher threshold for starting to pay tax, those purchasing more expensive properties will still pay less – where the home is bought for them to live in.”

Date published 16 Jul 2020 | Last updated 16 Jul 2020