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Understanding the Latest Changes to Land Transaction Tax (LTT)

Recent changes to the higher rate of Land Transaction Tax (LTT) in Wales may impact those purchasing additional properties. Below, we outline what LTT is, how it works, and the changes you need to know.

What is Land Transaction Tax (LTT)?

LTT is a tax payable to the Welsh Revenue Authority when an individual or company purchases freehold or leasehold property or land in Wales.

  • When to Pay: The tax must be filed on the day of completion and paid within 30 days of submission.
  • How It’s Calculated: The tax is based on the purchase price of the property, with a banding system applied. As property value increases, so does the percentage of tax payable.

What is the Higher Rate of LTT?

The higher rate of LTT typically applies in the following situations:

For Residential Transactions:

  • The property is valued at over £40,000.
  • The buyer already owns one or more properties.
    • This includes properties held in trust for children or properties in which the buyer has a beneficial interest.

For Company Purchases:

  • Companies purchasing property will usually pay the higher rate, provided the property value exceeds £40,000.

What Are the New Changes?

As of 11th December 2024, the higher rate of LTT has increased by 1%. However, transactions exchanged on or before 10th December 2024 will typically be taxed at the previous rates.

The updated LTT rates are as follows:

RateProperty Value
5%Up to and including £180,000
8.5%Over £180,000 up to and including £250,000
10%Over £250,000 up to and including £400,000
12.5%Over £400,000 up to and including £750,000
15%Over £750,000 up to and including £1,500,000
17%Over £1,500,000

Can You Claim a Refund?

You may be entitled to a partial refund of the higher rate LTT in certain circumstances.

  • Eligibility: If you sell your previous main residence within three years of purchasing a new main residence, you could receive a refund. This would adjust the tax payable to the standard Land Transaction Tax rate.

Need Help?

If you’re unsure whether you need to pay the higher rate of LTT, the Welsh Revenue Authority offers an online tool to help you determine your position. You can access it here:

Check if you need to pay the higher rate of Land Transaction Tax | GOV.WALES