Land Transaction Tax (LTT)

You must pay LTT if you buy a property or land over a certain price in Wales.

The current LTT threshold is £180,000 for residential properties (if you do not own another property) and £225,000 for non-residential land and property.

There are different rules if you already own one or more residential properties, and you may need to pay the higher residential rates. However, if you’re replacing your main residence, the higher rates may not apply.

You pay the tax when you:

• Buy a freehold property
• Buy a new or existing leasehold
• are transferred land or property in exchange for payment, for example, you take on a mortgage or buy a share in a house

Your solicitor will usually handle the payment of LTT. You have 30 days from the date of completion to pay. It is legally your responsibility to ensure stamp duty is paid.

Land Transaction Tax is arranged in bands but is also tiered, so you will pay a different rate on different portions of the property value.

There are several rate bands for Land Transaction Tax (LTT).

The tax is calculated on the part of the property purchase price falling within each band.

For example, if you buy a house for £300,000, the LTT you owe is calculated as follows:

0% on the first £180,000 = £0

3.5% on the next £70,000 = £2,450

5% on the next £50,000 = £2,500

Total LTT = £4,950

When anyone purchases a second property, be it a second home or a buy-to-let property, they will have to pay an additional 3% LTT on each tier.

If you are married or in a civil partnership and either partner owns another property, you will be liable even if you currently do not own any properties, and this is your first purchase.

If a company buys a property, the same rules apply.

If the purchase price is under £40,000, there is no stamp duty due.

Caravans, mobile homes, and houseboats are also exempt.