Stamp duty in Wales is a government tax imposed on the purchase of residential properties1. It exists to discourage people from buying and selling homes too often, preventing the housing market from being flooded with properties that are constantly changing hands. Stamp Duty was introduced in Wales in 1803, and it has been applied ever since.
In case you’re wondering,
The amount varies depending on what county you are buying and other factors such as whether it’s a new property or not. Any other purchasers are involved with the transaction.
You will be charged stamp duty when you buy your home. However, some buyers may find that they can claim back up to £15,000 of this fee! It also varies depending on where you live in Wales, so it’s important to know your local rate.
Different Rates for Different Types of Property Transactions
- First, £150,000 of the value is exempt from LTT (£0) – This applies to most residential homes, including those worth up to £200,000 and second properties such as buy-to-let.
- The next band is between £150,001 and £250,000, where LTT is 0% on the first two hundred grand (i.e. no tax charged at all), but then it increases gradually by way of a sliding scale up to 12%.
- The next band is between £250,001 and up to £500,000 where LTT is 0% on the first two hundred grand, but then it increases gradually by way of a sliding scale up to 16%.
- The next band is from 250K upwards. It has no exemption at all, so again the tax rate starts with 0%, slides up through 12%, 14%, 16% etc., depending upon how many hundreds of thousands your total value exceeds.
- The next band is from 125,000 upwards and has no exemption. The tax rate starts with 0%, slides up through 12%, 14%, 16%, etc., depending upon how many hundreds of thousands your total value exceeds.
- The final band is for those properties over 250k in price. Here we have exemptions available to first-time buyers and other exemptions available to various people with specific circumstances.
For those who are eligible for the 0% or 12% rates, you must apply. You may not qualify if buying with someone else unless they too have a disability which is worth checking out before proceeding as well!
First-Time Buyers LTT Rates
A first-time buyer is someone who has never owned or shared ownership of any residential property anywhere in the world before buying their own home via a “first-time buyer” mortgage.
On the other hand,
You are also considered a first-time buyer if you’ve lived with your partner as joint tenants for less than 24 months after getting married/civil partnered or moving in together.
The stamp duty in Wales for first-time buyers is set at a rate of 0.25% and not the usual UK threshold of £125,000 on property worth up to £300,000. For properties costing more than this limit, there will be an additional amount paid.
Home Movers LTT Rates
£0 on a property worth less than £180,000 when you buy it or sell it; 0.25% of the purchase price from £180,001 to £250,000; and 12% of the sale price above that at a rate which increases by one percentage point for every different band.
So, 27% between £251,001 and £500 000 and 33% over £500 000. The Welsh Government advises buyers not to pay more stamp duty tax in their area than they would have been liable for had they bought in England. Some areas charge higher rates, like Monmouthshire.
Buy-to-Let LTT Rates
From April 2018, the Welsh Government raised the Land Transaction Tax rates for buy-to-let properties in Wales. The new LTT rate is 0.55% for all non-residential property, whether it’s a commercial or residential investment, and regardless of when you bought your property.
It replaces the old system where landlords paid different rates depending on when they purchased their property and its use.
Buyers of second homes are unaffected by these changes as long as they meet specific criteria: you must live at least three months each year in Wales; spend more than 183 days per year here; are not working abroad; cannot claim to have a habitual residence outside Wales and do not own a property in Wales.
It will equate to an increase of £129 for every £100,000 spent on a buy-to-let purchase. It would be equivalent to moving from paying 0% Land Transaction Tax2 under the old rules. Consequently, no Stamp Duty up to buying at today’s stamp duty rate and then increasing it by .55%.
LTT is collected by the Welsh Revenue Authority (WRA).
After submitting an LTT return, the taxpayer or their representative must pay any taxes owed. You must make payment within 30 days of the transaction’s effective date.
The completion date is usually the effective date. If your solicitor can’t do this for you, you can file it yourself. You can pay using digital, overseas, or cheque payments.
How Do I Pay My LTT in Wales?
In order to pay for your LTT, you will need an account with a UK debit card. You can make payments using the Pay by Card option on our website and enter your card number or use one of these cards: Visa Debit (UK), Mastercard (UK).
What Is the Current Stamp Duty in Wales?
The current stamp duty in Wales is 0% for properties that are worth under £150,000. For those with a property value of over £150,000 the rate ranges from 0-12%.
Do First Time Buyers in Wales Pay Stamp Duty?
First-time buyers pay stamp duty at the following rates:
The current maximum amount for first-time buyers in Wales is £300,000. If your property value falls within this bracket then you will need to pay a minimum of 0% on stamp duty and 12% if it exceeds that.
Will Wales Change Stamp Duty?
If the Wales government wants to change stamp duty it must be put forward through an act of parliament.
The UK legislation on stamp duty is not easy for those outside the property industry. Still, there are some simple ways you can avoid paying it all together either as a buyer or seller and minimize your liability too.
Some recent changes that will affect many people living in Wales may be affecting you whether buying or selling a home in Wales from now onwards. It’s always recommended to check with a property expert who will allow you to estimate how much tax would be charged on your house purchase.