UPDATE: Since the below article was first published, the Welsh Government have confirmed that the rise to the Land Transaction Tax thresholds will be extended until the end of June, 2021. The dates in the article below have been updated to reflect this.
What is Land Transaction Tax (LTT)?
Since April 2018, those who purchase properties in Wales have been required to pay LTT on the completion of their property purchase. Prior to April 2018, purchasers would have been required to pay a Stamp Duty charge on completion of their purchase. Tax rates are calculated on the price and type of property (e.g residential or non-residential property).
What are the changes?
The changes relate to the current tax band thresholds. At present, all residential properties that are purchased for less than £180,000 are exempt from paying any charges, however from 27th July 2020 the threshold for exempt residential properties has now been raised to £250,000 meaning that those bought for less than this amount will also be exempt from paying LTT. The table below displays the current tax amounts and the upcoming changes.
| RESIDENTIAL PROPERTIES – LTT | (On purchases up until 27th July 2020) | (For purchases from 27th July 2020 – 30th June 2021) |
| Price threshold | LTT Rate | LTT Rate |
| Up to £180,000 | 0% | 0% |
| £180,001 – £250,000 | 3.5% | 0% |
| £250,001 – £400,000 | 5% | 5% |
| £400,001 – £750,000 | 7.5% | 7.5% |
| £750,001 – £1,500,000 | 10% | 10% |
| Over £1,500,000 | 12% | 12% |
What about buy-to-let and second home purchases?
The changes only apply to properties being bought as main residential homes. No changes have been made to buy-to-let and second home purchases.
I’m interested in purchasing a property between £180,001 to £250,000, how much would I save if the purchase completed before the end of June 2021?
As an example, let’s take a look at one of our current properties for sale at our development, The Hedgerows in Pennard, Swansea.
| Housetype | Price | Current LTT Rate
(up to 27th July 2020) |
Future LTT Rate
(from 27th July 2020 to 30th June 2021) |
| The 2-Bedroom Pwll Du | £235,000 | £1,950 | £0 |
| = Saving of £1,950!* | |||
The 2-bedroom ‘Pwll Du’ at The Hedgerows, Pennard
I’m interested in purchasing a property over the value of £250,000, will I save any money on LTT if the purchase completes before the end of June 2021?
Yes! LTT is calculated on each tax threshold band so there are still big savings to made even if the property you are purchasing is more than £250,000. Let’s use one of our homes for sale at Colman Vale, Pen y Fai, as an example:
| HOUSE TYPE | PRICE | CURRENT LLT RATE
(Up to 27th July 2020) |
FUTURE LLT RATE
(from 27th July 2020 to 30th June 2021) |
| The 4 Bedroom Terfel | £425,000 | £11,825 | £9,375 |
= Saving of £2,450!*
The 4-bedroom ‘Terfel’ housetype at Colman Vale, Pen y Fai
*All calculations above have been made on properties that will be used as a main residential home. Calculations taken from Welsh Government’s Land Transaction Tax Calculator which can be found on their website https://lttcalculator.wra.gov.wales/
If you’d like further information on our homes for sale at The Hedgerows or Colman Vale, please contact our Sales Advisors on the contact details below:
The Hedgerows, Pennard – Amanda Pennock on 07866 602807 or AmandaP@pennanthomes.co.uk
Colman Vale, Pen y Fai – Laraine Griffiths on 07794 214525 or LaraineG@pennanthomes.co.uk
