Land Transaction Tax (LTT) Under Embargo ..
If you’re a solicitor or conveyancer working on property and land deals in Wales, get ready for the biggest tax change there in 300 years. The new Land Transaction Tax (LTT), the first Welsh-only tax since the 13th century, will replace Stamp Duty Land Tax (SDLT).
Instead of filing an SDLT form with HMRC, professionals will now be working with the new Welsh Revenue Authority (WRA), a department of the Welsh government that will be responsible for collecting and managing the LTT.
The new Welsh tax means there are now three distinct land tax systems operating in the UK. Scotland replaced the SDLT with the Land and Buildings Transaction Tax (LBTT) in 2015. Now, from April, only England and Northern Ireland will continue to adhere to SDLT.
The new rates that will apply in Wales from April are:
| Land Transaction Tax and Stamp Duty Land Tax | |
| Residential properties Wales | Residential properties England |
| Main residential Rate of LTTax
(percentage of portion of purchase price) |
Main residential Rate of SDLT
(percentage of portion of purchase price) |
| £0 – £180,000 – 0% | £0 – £125,000 – 0% |
| £180,000 – £250,000 – 3.5% | £125,000 – £250,000 – 2% |
| £250,000 – £400,000 – 5% | £250,000 – £925,000 – 5% |
| £400,000 – £750,000 – 7.5% | |
| £750,000 – £1.5 million – 10% | £925,000 – £1.5 million – 10% |
| Over £1.5 million – 12% | Over £1.5 million – 12% |
In England, first-time buyers are exempt from paying SDLT on the first £300,000 of a property transaction. That exemption won’t apply in Wales, but as the average property price of a first-time buyer purchase in Wales is £135,000, below the £180,000 threshold, few first-time buyers are expected to pay LTT (Investors, commercial, and high net worth individuals will find Wales less attractive than England).
Second home buyers and buy-to-let investors have paid a 3 percent supplement on SDLT since 2016. The new Welsh LTT will continue to apply that supplement on additional rates. Yet Additional Higher Rate Rules will be different again in Wales than when compared to England.
The WRA will collect and manage the revenue and will also be responsible for developing the guidance to help taxpayers and their agents in ensuring they comply with their obligations to pay the tax. The WRA is a non-ministerial department of the Welsh government.
All agents acting for a buyer in Wales will soon file LTT returns to the WRA instead of HMRC. All professionals who will be acting for clients in land and property transactions in Wales will need to register an account with the WRA.
Looking to the future…
Searches UK highly recommends getting up to date with the future of property transactions with our Property Tax Portal.
The portal provides an online stamp duty land tax submission form or LBTT or LTT form. This modern application duplicates the layout of the paper version and highlights any errors before the form is submitted, which reduces the risk of timely or even costly delays. WRA as yet have not released information of what and how their penalties will differ to that of England.
There are many benefits from using this online system, including multiple time-saving templates, audit trails, PDF generated forms, available support and assurance that the property tax form has been completed correctly. This will help you to save time, stress and money, while providing a higher quality of service to your clients.
Searches UK’s Property Tax online portal was built from the conveyancer’s perspective, making the completion of forms much easier. The unique application integrates with a wide range of case management systems as well as other technology currently in place. It is a simple browser and the most efficient of its kind… we can’t recommend it enough!
You can be confident that your property tax form has been completed correctly when you complete SDLT through Searches UK.
How to order SDLT
You can easily add Property Tax of SDLT or LTT to your bespoke search bundles for you to access online 24/7.
For more information about SDLT or to add this fantastic product to your search bundles, please contact the team on 0800 043 1815 or email [email protected]
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