Following the reduction in the rate of residential Stamp Duty Land Tax (SDLT), the Welsh government has announced that it will reduce the rate of Land Transaction Tax (LTT).
LTT is payable by the purchaser of residential or non-residential property in a land transaction occurring in Wales. SDLT is payable on land transactions in England and Northern Ireland, and Land and Buildings Transaction Tax (LBTT) is payable on land transactions occurring in Scotland.
From 27 July 2020, the starting threshold for residential LTT will rise from £180,000 to £250,000. This will apply until 31 March 2021. The tax reduction will not apply to purchases of additional properties, including buy-to-let and second homes.
The Welsh government predicts that around 80% of homebuyers in Wales will pay no tax when purchasing their home, and that buyers of residential property who would have paid the main rates of LTT before 27 July will save up to £2,450 in tax.
Commenting on the matter, Rebecca Evans, Minister for Finance, said: ‘These rates and thresholds have been set so they more closely reflect the property market in Wales and will ensure that we retain a progressive regime that expects those with the broadest shoulders to contribute a larger share in tax.’
More information can be found here.
