Welsh Government Budget – Land Transaction Tax Rates Announced

Posted on: October 11th, 2017 by Sarah Curzon No Comments

From 1 April 2018 the Welsh Government will have tax raising powers.  Wales is to introduce the Land Transaction Tax which will replace stamp duty land tax and yesterday Finance Secretary, Mark Drakeford announced the rates which will apply in Wales from 1 April 2018.

Residential Property

Current Rates of Stamp Duty Land Tax

From To Rate
£0 £125,000 0%
£125,001 £250,000 2%
£250,001 £925,000 5%
£925,001 £1,500,000 10%
£1,500,0001 12%

Land Transaction Tax Rates From 1st April 2018

From To Rate
£0 £150,000 0%
£150,001 £250,000 2.5%
£250,001 £400,000 5%
£400,001 £750,000 7.5%
£750,001 £1,500,000 10%
£1,500,001 12%

If you’re buying a house in Wales from April 2018 you will pay tax on only the value over £150,000 which is a saving of £500 compared to England.  A further example of the saving in Wales is for a house work £200,000 you will be paying 2.5% of £50,000 which is £1,250 compared to £1,500 that you would pay in England.  Anyone buying a house worth between £250k and £400k will pay the same in England and Wales.

The bad news comes for those buying property worth more than £400,000 in Wales.  These purchasers will have to pay a higher rate of tax in Wales compared to England.  On a house worth £500,000 you would pay £17,500 in Wales but only £15,000 in England.  The biggest increase is for those buying houses in Wales worth more than £750,000 as the tax rises to 10%.  For someone buying a house for £925,000 house in Wales would pay £53,750 with a purchaser in England paying £36,250

Anyone buying a second home will still have to pay an additional 3% on the value of the property as they already do under the Stamp Duty Land Tax Regime.

Non Residential

Non residential land transaction tax rates

From To Rate
£0 £150,000 0%
£150,001 £250,000 1%
£250,001 £1,000,000 5%
£1,000,001 6%

Non residential land transaction tax rates – Leases

From To Rate
£0 £150,000 0%
£150,001 £2,000,000 1%
£2,000,001 2%

Wales will have the lowest starting rate of tax for the purchase of business premises in the UK.  Anyone buying non residential property in Wales up to £1.1m will either pay no tax or up to £1,000 less than under the stamp duty land tax regime.

For more information on how this could affect you contact [email protected]

 

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