On the 1st of April 2018, a new property tax came into force, affecting all properties purchased in Wales.
Land Transaction Tax replaces Stamp Duty Land Tax in Wales, and is payable when you buy the freehold or leasehold interest in any property or land above £40,000.
The new tax is largely in line with Stamp Duty Land Tax, with the intention of providing stability and reassurance to the property market. The tax bands have been tweaked slightly though, ostensibly to simplify the tax and to make it fairer, and to ensure that they properly reflect the property market in Wales. Land Transaction Tax is collected by the Welsh Revenue Authority rather than the Inland Revenue.
The key difference is that no Land Transaction Tax is payable on residential properties bought for £180,000 or less, whereas only residential properties bought for less than £125,000 in England will qualify for the zero rate.
This means that a property purchased in beautiful Anglesey for £225,000 will now incur Land Transaction Tax of £1,575 rather than the old Stamp Duty Land Tax rate of £2,000.
Land Transaction Tax rates vary slightly for commercial properties, and the 3% surcharge for “additional properties” or “second homes” still applies in Wales.
If you are buying or selling a property, whether in England or Wales, please contact Andy Roscoe at Meaby&Co for advice: firstname.lastname@example.org or call 020 7703 5034.
Meaby&Co is authorised and regulated by the Solicitor’s Regulation Authority (SRA Number 447880) and registered in England and Wales with registered number OC322672 at 2 Camberwell Church St, London, SE5 8QY.