Key Points — Wales LTT 2025/26
- LTT replaced Stamp Duty in Wales from 1 April 2018 — administered by the Welsh Revenue Authority (WRA)
- Highest nil-rate threshold in the UK: £225,000 — most buyers in Wales pay no LTT at all
- NO first-time buyer relief — unlike England and Scotland, Wales does not offer separate FTB rates
- Higher rates for additional properties: +4% on each band for second homes and buy-to-lets
- 3-year reclaim window for higher rates if you sell your previous main residence
- Filing deadline: 30 days from completion
What Is Land Transaction Tax (LTT)?
Land Transaction Tax (LTT) is Wales’s property purchase tax, replacing UK Stamp Duty Land Tax (SDLT) from 1 April 2018. It was introduced following the devolution of tax powers to the Welsh Parliament (Senedd Cymru) under the Wales Act 2014. LTT is collected and administered by the Welsh Revenue Authority (WRA), which was established by the Tax Collection and Management (Wales) Act 2016.
Like SDLT in England and LBTT in Scotland, LTT operates on a progressive banding system. Each portion of the purchase price is taxed at the rate for that band only — you never pay a higher rate on the entire purchase price simply because you cross a threshold. This “slice” system is fairer and avoids the cliff-edge tax jumps that existed under the old slab-based Stamp Duty system.
Wales is the third UK nation to have its own property tax, after Scotland introduced LBTT in 2015. Northern Ireland continues to use SDLT alongside England. The tax you pay depends on where the property is located, not where the buyer lives. A buyer based in Bristol purchasing a property in Cardiff pays Welsh LTT; a buyer in Swansea purchasing in Manchester pays English SDLT.
Key Features of LTT
Several features distinguish Welsh LTT from the property taxes in other UK nations:
- Highest nil-rate threshold: At £225,000, Wales has the highest threshold at which property tax starts, compared to £125,000 in England and £145,000 in Scotland. This means many Welsh property purchases are entirely tax-free
- No first-time buyer relief: Wales is the only UK nation that does not offer separate first-time buyer rates or relief. The Welsh Government has argued that the high nil-rate threshold already benefits first-time buyers sufficiently
- Moderate additional property surcharge: At 4 percentage points above standard rates, the Welsh higher rates are lower than Scotland’s 6% ADS but close to England’s 5% surcharge structure
- Generous reclaim window: Buyers who pay higher rates because they haven’t yet sold their previous home have 3 years to complete the sale and reclaim — the same as England and much longer than Scotland’s 18 months
Who Has to Pay LTT?
LTT must be paid by the buyer of land or property in Wales when the purchase price exceeds the relevant threshold. For residential property, this means any purchase above £225,000. For non-residential property, the threshold is £225,000. LTT applies to individuals, joint buyers, companies, trusts, and any other legal entity purchasing property in Wales.
Your solicitor or conveyancer will normally handle the LTT return and payment on your behalf. The return must be filed with the WRA within 30 days of the effective date of the transaction, which is usually the completion date.
LTT Rates for Residential Property 2025/26
The following LTT rates apply to residential property purchases in Wales for the 2025/26 tax year.
| Up to £225,000 | 0% |
| £225,001 – £400,000 | 6% |
| £400,001 – £750,000 | 7.5% |
| £750,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
| Up to £225,000 | 4% |
| £225,001 – £400,000 | 7.5% |
| £400,001 – £750,000 | 9% |
| £750,001 – £1,500,000 | 11.5% |
| Over £1,500,000 | 14% |
Worked Example — Standard Purchase
A buyer purchases a property in Cardiff for £350,000:
| Band | Taxable Amount | Rate | Tax Due |
|---|---|---|---|
| £0 – £225,000 | £225,000 | 0% | £0 |
| £225,001 – £350,000 | £125,000 | 6% | £7,500 |
| Total | £350,000 | £7,500 |
The effective tax rate is 2.14%. In England, the same property would cost £7,500 in SDLT (also 2.14%), so at this price point the two systems produce an identical result. In Scotland, the same purchase would cost £8,350 in LBTT — making Wales and England cheaper by £850.
Worked Example — Higher Rates (Additional Property)
An investor buys a buy-to-let in Swansea for £300,000 while still owning their main residence:
| Band | Taxable Amount | Rate | Tax Due |
|---|---|---|---|
| £0 – £225,000 | £225,000 | 4% | £9,000 |
| £225,001 – £300,000 | £75,000 | 7.5% | £5,625 |
| Total | £300,000 | £14,625 |
The effective tax rate for this additional property purchase is 4.88%. In England, the same purchase would cost £20,000 (SDLT plus 5% surcharge), while in Scotland it would cost £22,600 (LBTT plus 6% ADS). Wales is therefore the cheapest option for additional property purchases at this price point.
Higher Rates for Additional Properties
When purchasing an additional residential property in Wales, higher LTT rates apply. The higher rates are 4 percentage points above the standard rates at each band. This surcharge applies to second homes, buy-to-let investments, holiday lets, and any residential property purchase where the buyer already owns another residential property.
When Do the Higher Rates Apply?
The higher LTT rates apply when:
- You are purchasing a residential property in Wales for £40,000 or more
- At the end of the day of purchase, you own two or more residential properties
- You are not replacing your only or main residence (the previous one must be sold first, or within the 3-year reclaim window)
Properties count towards your total regardless of where they are located — properties in England, Scotland, Northern Ireland, or abroad all count. The higher rates apply to the entire purchase price from the first pound, not just the amount above £225,000.
Reclaiming Higher Rates
If you purchased a new main residence and paid higher rates because you had not yet sold your previous home, you can apply for a refund. The conditions are:
- You sell your previous main residence within 3 years of buying the new one
- The new property was purchased as your intended main residence
- You apply for the refund within 12 months of the sale of your previous home (or within 12 months of the filing date, whichever is later)
Exemptions From Higher Rates
Certain situations are exempt from the higher LTT rates:
- Replacing your main residence: If you sell your previous main home on or before the day you complete the new purchase, higher rates do not apply
- Properties under £40,000: No higher rates (and indeed no LTT at all) on purchases below £40,000
- Caravans, mobile homes, and houseboats: These are generally not classed as dwellings for LTT purposes
- Property acquired by divorce or dissolution order: Property transferred under a court order following relationship breakdown is exempt
- Certain social housing transactions: Purchases by registered social landlords may qualify for relief
Wales LTT Calculator
Use our free calculator to work out how much Land Transaction Tax you will pay on a Welsh property purchase. Select your purchase type using the tabs.
| Band | Rate | Tax Due |
|---|
LTT vs SDLT vs LBTT: Three-Nation Comparison
Comparing property taxes across Wales, England, and Scotland helps buyers understand the relative cost of purchasing property in each nation. The differences can be substantial, particularly at the top and bottom ends of the market.
Standard Purchase Comparison
| Price | Wales LTT | England SDLT | Scotland LBTT |
|---|---|---|---|
| £150,000 | £0 | £500 | £100 |
| £200,000 | £0 | £1,500 | £1,100 |
| £225,000 | £0 | £2,125 | £1,600 |
| £250,000 | £1,500 | £2,500 | £2,100 |
| £300,000 | £4,500 | £5,000 | £4,600 |
| £350,000 | £7,500 | £7,500 | £8,350 |
| £400,000 | £10,500 | £10,000 | £13,350 |
| £500,000 | £18,000 | £15,000 | £23,350 |
| £750,000 | £44,250 | £27,500 | £48,350 |
| £1,000,000 | £69,250 | £41,250 | £78,350 |
Why No First-Time Buyer Relief?
The absence of first-time buyer relief in Wales is one of the most discussed aspects of LTT. The Welsh Government’s rationale includes several arguments:
- High nil-rate threshold: At £225,000, the nil-rate band already covers the average Welsh house price (approximately £215,000 in 2025). Most first-time buyers in Wales pay no LTT regardless
- Targeting concerns: First-time buyer relief in England primarily benefits buyers in London and the South East, where prices are highest. The Welsh Government argues this creates a policy that disproportionately benefits wealthier areas
- Simplicity: Not having separate first-time buyer rates simplifies the LTT system and reduces compliance costs
- Alternative support: Wales uses other mechanisms to support first-time buyers, such as the Help to Buy Wales scheme and shared equity programmes
However, critics argue that first-time buyers in more expensive areas of Wales (particularly Cardiff, the Vale of Glamorgan, and Monmouthshire) are disadvantaged compared to their English counterparts, who would pay no SDLT on purchases up to £300,000.
Welsh Revenue Authority (WRA)
The Welsh Revenue Authority (Awdurdod Cyllid Cymru) is the body responsible for collecting and managing LTT, as well as the Welsh Landfill Disposals Tax. It was established in 2017 and began collecting LTT from 1 April 2018.
Filing and Payment
An LTT return must be filed and any tax paid within 30 days of the effective date of the transaction. Key points:
- Online filing: Returns are submitted electronically through the WRA’s online portal
- Solicitor responsibility: Your solicitor or licensed conveyancer normally handles the return
- Penalties: Late filing attracts an initial fixed penalty, with further penalties for continued non-compliance
- Interest: Late payment incurs interest charges
- Notifiable transactions: Residential transactions of £40,000 or more must be notified to the WRA, even if no tax is due
Disputes and Appeals
If you disagree with an LTT assessment or decision made by the WRA, you have the right to appeal. The process is:
- First, request an internal review by the WRA
- If unsatisfied with the internal review, appeal to the Tax Tribunal (First-tier Tribunal, Tax Chamber)
- Further appeals can be made to the Upper Tribunal and beyond on points of law
Compliance and Enforcement
The WRA has powers to investigate LTT compliance, including the ability to issue information notices, conduct enquiries into filed returns, and impose penalties for inaccurate returns. The WRA has been increasingly active in compliance activity, particularly around the correct application of higher rates and the classification of mixed-use versus residential transactions.
Special LTT Situations and Planning
Shared Ownership Properties
Buyers purchasing through a shared ownership scheme in Wales have two options for paying LTT. They can either pay LTT on the initial share purchased (the “market value” election) or on the full market value of the property. The choice affects future staircasing costs. If you pay on the initial share only, you may owe additional LTT when you buy further shares. Discuss the most cost-effective option with your solicitor based on your plans.
Mixed-Use Properties
Properties with both residential and non-residential elements (such as a flat above a shop or a house with significant agricultural land) may qualify for non-residential LTT rates, which are generally lower. The WRA carefully scrutinises mixed-use claims, so it is important to have genuine non-residential use rather than attempting to reclassify a residential property.
Multiple Dwellings Relief
When purchasing two or more dwellings in a single transaction (for example, a house with an annexed granny flat), Multiple Dwellings Relief (MDR) may apply. MDR allows you to calculate LTT based on the average price per dwelling rather than the total transaction price, potentially reducing the overall tax bill. However, the Welsh Government has tightened the rules around MDR, and claims are increasingly scrutinised.
Non-Residential LTT Rates
For non-residential (commercial) property in Wales, different LTT rates apply: 0% up to £225,000, 1% from £225,001 to £250,000, 5% from £250,001 to £1,000,000, and 6% above £1,000,000. These are considerably lower than residential rates, which is one reason mixed-use classification is attractive to some buyers.
Lease Transactions
LTT applies to the grant and assignment of leases in Wales. For residential leases, LTT is generally charged on any premium (lump sum) paid. For non-residential leases, LTT may be charged on both the premium and the net present value (NPV) of the rent payable over the term. The rules for lease transactions are complex, and professional advice is strongly recommended.
Buying in Wales vs Across the Border
The Wales-England border creates interesting tax planning considerations. Properties on the Welsh side of the border (for example, in Monmouthshire or Wrexham) are subject to LTT, while those just across in England (Herefordshire, Shropshire, or Cheshire) are subject to SDLT. For properties in the £225,000 to £345,000 range, Wales offers lower tax. Above this, England is generally cheaper. Buyers in border areas should consider the total cost including property tax when comparing otherwise similar properties on each side.
History of Property Tax in Wales
Devolution of Tax Powers
The Wales Act 2014 gave the Welsh Parliament (Senedd Cymru) the power to set its own property transaction tax, replacing SDLT in Wales. This was part of a broader package of fiscal devolution that followed the Silk Commission recommendations. Wales was the last of the three devolved nations to gain property tax powers.
Key Timeline
- 2014: Wales Act 2014 devolves stamp duty powers to Wales
- 2016: Tax Collection and Management (Wales) Act establishes the WRA
- 2017: Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act receives Royal Assent
- April 2018: LTT replaces SDLT in Wales; WRA begins collecting tax
- December 2020: Nil-rate threshold temporarily raised to £250,000 (COVID response)
- June 2021: Temporary threshold reduced to £225,000
- 2022 onwards: Various adjustments to rates and bands through Welsh Budget process
Political Considerations
LTT rates are set by the Senedd through the annual Welsh Budget. The Welsh Government has used LTT as a tool for housing policy, adjusting rates to balance revenue needs with support for the housing market. The absence of first-time buyer relief remains politically contentious, with opposition parties periodically calling for its introduction. The higher rates for additional properties have been debated in the context of Wales’s second homes crisis, particularly in Welsh-speaking communities where holiday homes can dominate the housing stock.
Second Homes and Tourism Levy
Wales has taken an active approach to addressing second home ownership, which is seen as a significant issue in many rural and coastal communities. In addition to the LTT higher rates, local authorities in Wales now have the power to charge a council tax premium of up to 300% on second homes and long-term empty properties. Some local authorities, particularly Gwynedd, have implemented high premiums. The Welsh Government has also explored a tourism levy (visitor tax) that could further affect the economics of holiday home ownership.