The rules relating to stamp duty when buying a property in Wales are about to change.
Currently, the system in England and Wales is referred to as Stamp Duty Land Tax (SDLT). From 1st April 2018, the system in Wales will change and stamp duty will become known as Land Transaction Tax (LTT).
Here are the facts and figures you should be aware of if you are thinking of purchasing in Wales:-
- The new starting threshold for LTT will be raised to £180,000 – £55,000 higher than the current threshold of £125,000 for SDLT in England.
- There will no longer be the relief available to first time buyers introduced by the Chancellor in the budget of November 2017 after 1st April 2018.
- The additional rate of 3% will still apply to second home purchases.
- LTT rates will be higher than the current SDLT rates where a property is valued between £400,000 and £925,000, as the current single band is replaced with two bands.
Current Rates of SDLT (for a residential freehold property)
|Up to £125K||0%|
|£125K – £250K||2%|
|£250K – £925K||5%|
|£925K – £1.5M||10%|
LTT rates in Wales as of 1st April 2018
|Up to £180K||0%|
|£180K – £250K||3.5%|
|£250K – £400K||5%|
|£400K – £750K||7.5%|
|£750K – £1.5M||10%|
The average property price in Wales is around the £153,000 (according to UK House Price Index in July 2017), so the majority of people buying property in Wales will find that they will benefit from the new system.
Buyers likely to find themselves paying more in Land Transaction Tax than they would in SDLT will be those purchasing property for between £400,000 and £925,000, due to the additional band introduced.
If you have any queries about liability for LTT in Wales or SDLT in England, contact Gemma Williams on 0808 139 1696 or email us at [email protected]
Our team of property lawyers assist people with buying and selling property throughout England and Wales. We pride ourselves on provide an efficient, responsive and cost effective service that enables your transaction to proceed to completion without delay. Call us for a quote today.