Homebuyers in Wales – are you ready for stamp duty changes?

Homebuyers in Wales – are you ready for stamp duty changes?
A new stamp duty system is being introduced in Wales next month, which means that many buyers won’t pay the tax when purchasing a property costing up to £180,000.

Wales currently has the same stamp duty system as the UK, but this will be replaced in April by the Welsh Government’s new Land Transaction Tax (LTT).

The Welsh Government said the changes are being introduced to focus on Welsh needs and priorities, and to simplify the tax and make it fairer.

How the changes affect homebuyers

The changes mean that first-time buyers in Wales will no longer benefit from the stamp duty exemption on properties costing up to £300,000, which came into effect following the Budget last November.

Instead, all buyers in Wales won’t have to pay LTT on homes costing up to £180,000. Originally it was proposed that no LTT would be payable on homes costing up to £150,000, but this was changed to £180,000 in December last year.

Average first-time buyer prices in Wales are around £135,000, so most first-time buyers still won’t pay stamp duty when the system changes.

The Government claims that the new rates will mean 65% of all house sales in Wales will not be liable for tax, which will benefit more buyers than the current system of targeted relief for first-time buyers. According to Finance Secretary Mark Drakeford, the tax burden will be reduced for around 24,000 homebuyers, including first-buyers, and the average homebuyer in Wales will pay over £500 less tax than under stamp duty land tax.

The new rates and bands

The following table shows the new main residential LTT rates and bands in Wales.

Price ThresholdLTT rate
£0-£180,0000%
£180,000-£250,0003.5%
£250,000-£400,0005%
£400,000-£750,0007.5%
£750,000-£1.5m10%
£1.5m-plus12%

Second homes and buy-to-let properties will be charged at 3% more than the main residential rates.

Use our stamp duty calculator to find out how much LTT you’ll pay. Simply select Wales from the drop-down box and add your property purchase price, and the calculator will tell you how much, if any, LTT you’re liable for. The calculator can also tell you how much stamp duty you must pay if you’re buying in England or Northern Ireland, or in Scotland.
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