What is it and how much is it going to cost me?
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 no 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
How do I pay it?
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.
How much will I have to pay?
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
Buy to Let or Second Home LTT.
When anyone purchases a second property, be it a second home or a buy to let property you will have to pay an additional 3% LTT on each tier.
Who is exempt from Buy to Let Land Transaction Tax?
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.