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Changes to main residential rates and bands for Land Transaction Tax announced

ON 27 September 2022, the Welsh Government announced the main residential rates of Land Transaction Tax (LTT) will change on 10 October 2022.

From today:

the starting threshold for paying main residential rates of LTT will increase from £180,000 to £225,000; and

the first tax band will cover transactions from £225,000 to £400,000 taxed at 6%.

The tax rates and bands for higher residential rate and non-residential transactions are unchanged from those effective from 22 December 2020.

The Welsh Government has updated the page on rates and bands set by the Welsh Government, and our calculators.

People can use the Land Transaction Tax calculator to help you work out how much tax to pay. The calculator will use the date you enter to work out which rates and bands apply.

If the buyer completes on buying a property:

before 10 October you pay the previous rates of tax

on or after 10 October you pay the new rates of tax

In most cases, the previous rates can be used where contracts are exchanged before 10 October 2022, but the purchase is not completed until on or after this date.

We have transitional guidance for October 2022 main residential rates change. This expands on the regulations and covers which rates will apply to a transaction.

A solicitor or conveyancer to file a return online showing you’re using transitional rules

Disagree with the tax calculation generated.

Enter the tax due calculated using the previous rates and bands.
People can use the tax calculator to help calculate the tax due, but you should use the exchange date as the effective date so that the calculation is made using the correct rates and bands.

Select ‘transitional rules apply’ as the reason for disagreeing with the tax calculation and explain how you came to your calculation.

If people ar filing a paper return, under question 100, select ‘transitional rules apply’ if you have used the transitional rules to calculate the tax based upon the rates and bands for LTT before 10 October 2022.

The Welsh Government has updated its guidance and services, including specific guidance for tax professionals.

Anyone with a transaction query, can contact us.

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