What is Land Transaction Tax?
You pay Land Transaction Tax if you buy a property or land in Wales for a price of £225,000 or more. LTT is payable on residential properties and non-residential land or property. Use our Land Transaction Tax Calculator below to work out how much tax you will need to pay.
How much Land Transaction Tax will I need to pay?
You pay Land Transaction Tax on property purchases from £225,000 based on set of tax bands set out below
Land Transaction Tax – Residential Property Rates
| Property rates and band | LTT Rate |
| The portion up to and including £225,000 | Zero |
| The portion over £225,000 up to and including £400,000 | 6% |
| The portion over £400,000 up to and including £750,000 | 7.5% |
| The portion over £750,000 up to and including £1,500,000 | 10% |
| The portion over £1,500,000 | 12% |
When do I need to pay Land Transaction Tax?
Land Transaction Tax must be paid on the date of completion of your purchase – therefore sufficient funds must be lodged with your Solicitor prior to that date.
You cannot extend your mortgage to borrow funds to cover your Land Transaction Tax.
Who pays Land Transaction Tax?
Land Transaction Tax is paid in most cases by the new owner of the land or property.
Family gifts to cover Land Transaction Tax are acceptable, as is payment of Land Transaction Tax made by builders on new property.
How much Land Transaction Tax will a first time buyer need to pay?
Since Land Transaction Tax has an extended zero rate threshold of £225,000 (some 55% more than the Scottish limits on LBTT of £145,000, and nearly double the English SDLT threshold of £125,000), there is no additional first time buyers allowance for LTT.
How much is Higher Residential Tax Rate?
Where a buyer already owns a property or share of a property worth £40,000 or more anywhere in the World, then buys a second property, they can be liable to pay Higher Residential Tax Rate.
Higher Residential Tax Rate has a higher set of tax bands than those due on a standard purchase. This can be paid by:
- someone buying a second home
- someone buying a rental property
- someone buying a home for friend or family to use
- a company buying a property
A homeowner, who is moving home and sells their property at the same time, or before their new purchase with not pay higher residential tax rate.
A homeowner, buying a new home and selling their previous home with 36 months of the new purchase will pay higher residential tax rate – once the sale of the previous home is complete, the additional higher residential tax can be reclaimed.
Higher Residential Tax Rates
| Property rates and band | LTT Rate |
| The portion up to and including £180,000 | 5% |
| The portion over £180,000 up to and including £250,000 | 8.5% |
| The portion over £250,000 up to and including £400,000 | 10% |
| The portion over £400,000 up to and including £750,000 | 12.5% |
| The portion over £750,000 up to and including £1,500,000 | 15% |
| The portion over £1,500,000 | 17% |
Land Transaction Tax buyers who are married or in a Civil Partnership
If you are Married or in a Civil Partnership LTT rules are applied as if you and your spouse/partner are a single economic unit.
Therefore, for example, if your Spouse already owns a property and you are a first time buyer, higher residential rates could apply even if your spouse is not involved in the new purchase.
What rate of Land Transaction Tax does an overseas buyer pay?
An overseas buyer, buying in Wales, pays Land Transaction Tax at the current rates, plus 2% Land Transaction Tax surcharge.
LBT – Important note
Before committing to purchase or transfer of property you should speak to your Solicitor to:
Confirm the Land Transaction tax due
Confirm you have the funds to cover the cost of the tax