LTT for Second Homes

Higher LTT rates apply to most additional property transactions in Wales.

Higher LTT Rates

Under the Welsh LTT system higher LTT rates apply to transactions involving the purchase of an additional residential dwelling. Additional property types include second homes and buy to let property.

The higher LTT rates have been introduced by the Welsh Government and approved by the National Assembly for Wales. The higher LTT rates are effective from 1st April 2018.

The LTT surcharge will be charged if the purchaser of the new property already owns a dwelling, and the dwelling is not replacing their main residence.

What are the LTT rates for additional property?

The LTT rates for additional property purchases are shown in the table below:

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 3% 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.

Replacing a main residence

Someone who is replacing their main residence can claim a refund of the LTT Surcharge if their old home is sold within 36 months of buying their new one. Refunds can be requested via the Welsh Revenue Authority by submitting an LTT amendment and refund form.

Ownership of an existing property

The LTT Surcharge will normally be charged if the purchaser of the new property already owns a residential property, and the property is not replacing their main residence. Property ownership is not limited to Wales and properties can be located anywhere in the world.

Existing ownership of a range of property types including holiday homes, second homes and buy to let investments will be considered when applying the higher LTT surcharge. Subsidiary dwellings within a principal property are normally exempt.

Joint purchasers

The LTT surcharge will be applied to a joint property purchase if any person involved in the transaction already owns a property and does not meet the exemption criteria below. Joint purchasers include spouses, civil partners, cohabitants and children of these groups.

LTT exemptions

The following property transactions are normally exempt from the higher LTT rate.

1. Property worth less than £40,000.
2. Non-residential or mixed use transactions.
3. Transactions involving subsidiary dwellings.
4. Replacing a main residence.
5. Retaining interests in former matrimonial home following a divorce or dissolution of civil partnership.
6. Transactions made by a court appointed deputy for a minor child.