Stamp Duty Land Tax in Wales
On 1 April 2018, the Welsh Assembly Government will introduce its own Land Transaction Tax (LTT) to replace Stamp Duty Land Tax (SDLT). This will mean that England, Scotland and Wales will each have their own separate regime for taxing the acquisition of land.
There are a lot of similarities between the existing SDLT system and the new LTT system. Rates are tiered as with SDLT and the main reliefs will continue to apply. However, the rates themselves will be different.
The following rates are correct as at 26 October 2017.
Residential Rates
| Rates in Wales (LTT) | Rates in England (SDLT) |
|---|
| From | To | Rate | From | To | Rate |
|---|---|---|---|---|---|
| £0 | £150,001 | 0% | £0 | £125,000 | 0% |
| £150,000 | £250,000 | 2.5% | £125,001 | £250,000 | 2.0% |
| £250,001 | £400,000 | 5.0% | £250,001 | £925,000 | 5.0% |
| £400,001 | £750,000 | 7.5% | £925,001 | £1,500,001 | 12.0% |
| £750,001 | £1,500,000 | 10.0% | £1,500,000 | ||
| £1,500,001 | 12.0% |
Examples of residential prices:
| Price | Wales (LTT) | England(SDLT) |
|---|---|---|
| £200,000 | £1,250 | £1,500 |
| £300,000 | £5,000 | £5,000 |
| £400,000 | £10,000 | £10,000 |
| £500,000 | £17,500 | £15,000 |
| £600,000 | £25,000 | £20,000 |
| £700,000 | £32,500 | £25,000 |
| £800,000 | £41,250 | £30,000 |
| £900,000 | £51,250 | £35,000 |
| £1,000,000 | £61,250 | £43,750 |
| £1,500,000 | £111,250 | £93,750 |
| £2,000,000 | £171,250 | £153,750 |
| £2,500,000 | £231,250 | £213,750 |
| £3,000,000 | £291,250 | £273,750 |
The proposed rates mean that with a property price of up to £250,000 there will be a tax saving in Wales. Between £250,001 and £400,000 the rates are the same on both sides of the border, but any price over £400,001 sees the purchasers of Welsh properties penalised.
It is worth noting that the 15% flat rate for residential properties being acquired by a corporate entity has been abandoned in the LTT system.
Non-residential (and mixed use) Rates
| Rates in Wales (LTT) | Rates in England (SDLT) |
|---|
| From | To | Rate | From | To | Rate |
|---|---|---|---|---|---|
| £0 | £150,000 | 0% | £0 | £125,000 | 0% |
| £150,001 | £250,000 | 1% | £150,001 | £250,000 | 2.0% |
| £150,001 | £1,000,000 | 5.0% | £250,001 | 5.0% | |
| £250,001 | 6%% | ||||
| £1,000,001 | 10.0% | ||||
| 12.0% |
Examples of non-residential prices:
| Price | Wales (LTT) | England(SDLT) |
|---|---|---|
| £250,000 | £1,250 | £2,000 |
| £500,000 | £13,500 | £14,500 |
| £750,000 | £26,000 | £27,000 |
| £1,000,000 | £38,500 | £39,500 |
| £1,500,000 | £68,500 | £64,500 |
| £2,000,000 | £98,500 | £88,500 |
| £2,500,000 | £128,500 | £113,500 |
| £3,000,000 | £158,500 | £138,500 |
The rates mean that LTT for the non-residential property will be lower than the English SDLT equivalent for prices up to £1,100,000.
UPDATE: 11 December 2017
A new “First Time Buyer” relief was introduced into SDLT by the November 2017 budget (click here for details).
The Welsh Assembly Government has announced that when the LTT regime starts in April 2018, a nearly identical first buyer relief will be available but will be restricted to properties costing less than £180,000.
Call us on 0345 370 1000 for more details.