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Stamp Duty News
Stamp duty for first time buyers has been abolished for most purchasers.
Stamp duty for buy to let property has increased substantially from April 2016.
Stamp duty for second homes also attracts a 3 percent surcharge from April 2016. Mobile homes, caravans and houseboats are exempt.
Stamp duty refunds are available for home movers replacing their main residence. The original home must be sold within 3 years.
Stamp duty calculations are different in England and Northern Ireland to LBTT calculations in Scotland and LTT calculations in Wales.
Land Transaction Tax Rates Wales
LTT is payable when you buy or lease a building or land over a certain price.
LTT rates
New LTT rates and bands were introduced from April 2018. For residential purchases, LTT is broadly based on SDLT with buyers paying tax on amounts between bands, not on the full purchase price of a property.
Residential LTT rates
A property is regarded as being "residential" if it complies with certain criteria. In most cases the definition of a residential property applies to:
- Any building that is used or is suitable for use as a dwelling, or is in the process of being constructed or adapted for such use.
- Land that is or forms part of the garden or grounds of a dwelling (including any building or other structure on such land).
- An interest in or right over land that subsists for the benefit of a building within a dwelling, or of land within a dwelling.
What are the residential LTT rates?
The current LTT rates are shown in the tables below. For single property purchases the LTT rates reflect the changes to LTT on 10th October 2022.
Single Property
| Tax Band | LTT Rate |
|---|---|
| less than £225k | 0% |
| £225k to £400k | 6% |
| £400k to £750k | 7.5% |
| £750k to £1.5m | 10% |
| rest over £1.5m | 12% |
For a single property LTT is exempt on the first £225,000. LTT is charged at 6% on the portion between £225,000 and £400,000, 7.5% on the portion between £400,000 and £750,000, 10% within the next band up to £1.5 million and 12% over that.
Additional Property
| Tax Band | LTT Rate | |
|---|---|---|
| less than £180k | 4%* | |
| £180k to £250k | 7.5% | |
| £250k to £400k | 9% | |
| £400k to £750k | 11.5% | |
| £750k to £1.5m | 14% | |
| rest over £1.5m | 16% | |
| * Under the current LTT system an additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £180k the LTT rate will be 4% on full purchase price. | ||
For an additional property LTT is exempt on the first £40,000. For purchases over 40,000 LTT is charged at 4% on the full purchase price up to £180,000, 7.5% on the portion between £180,000 and £250,000, 9% on the portion between £250,000 and £400,000, 11.5% between £400,000 and £750,000,14% within the next band up to £1.5 million and 16% over that.
LTT for buy to let and second homes
Under the Welsh LTT system higher rates of LTT apply to all transactions involving the purchase of an additional property. Additional property types include buy to let investments and second homes. In line with the rest of the UK, the surcharge applies to the full purchase price above an initial threshold of £40,000.
Replacing a main residence
An LTT exemption normally applies if someone is replacing their main residence. In such cases the higher LTT rates should not normally apply if the original home is sold within 36 months.
LTT for first time buyers
Specific first time buyer relief is not currently available under the Welsh LTT system, but the higher zero tax threshold of £225k should capture many first time purchases.
Companies and Trusts
The higher LTT rates would normally apply to Companies and Trusts buying residential properties.
Leases of residential property
Leases of residential property are exempt from LTT and no tax will be payable. This means LTT does not apply to rents payable under a lease for residential property.
