Land Transaction Tax (LTT) is the tax a buyer pays on property in Wales, collected by the Welsh Revenue Authority and in force since it replaced Stamp Duty Land Tax there on 1 April 2018. Main residential rates start at 6% above £225,000, there is no first time buyer relief, and buyers of additional homes pay a separate higher rates table that starts at 5% from the first pound. The return and payment are due within 30 days, not the 14 days allowed for SDLT.
Who pays LTT and who runs it?
LTT is paid by the buyer of property or an interest in property in Wales above the relevant threshold. It is managed and collected by the Welsh Revenue Authority (WRA) for the Welsh Government, which sets the rates and bands. The legislation is the Land Transaction Tax and Anti avoidance of Devolved Taxes (Wales) Act 2017. Section 44 imposes the duty to deliver a return with a self assessment, and section 57 requires the tax to be paid by the filing date.
The location of the property decides the tax. A purchase in England or Northern Ireland is within Stamp Duty Land Tax, and one in Scotland is within Land and Buildings Transaction Tax.
What are the main residential rates?
These rates have applied since 10 October 2022 and continue for the 2026 to 2027 tax year. Each rate applies only to the slice of the price within the band.
| Slice of the price | Rate |
|---|---|
| Up to £225,000 | 0% |
| £225,001 to £400,000 | 6% |
| £400,001 to £750,000 | 7.5% |
| £750,001 to £1,500,000 | 10% |
| Above £1,500,000 | 12% |
The WRA states plainly that there is no first time buyers’ relief in Wales. The relatively high nil band does the work instead: a first time buyer paying £225,000 in Wales pays nothing.
When do the higher residential rates apply?
Higher rates usually apply where an individual buys a residential property worth £40,000 or more and already owns one or more other properties, unless they are replacing their main home. The higher rates do not generally apply if you have sold the last main home you owned before buying the new one.
- Spouses and civil partners are treated as buying together. If higher rates would apply to either of you individually, they apply to the whole purchase.
- Residential property held for your children under 18 counts as yours, even if held through a trust.
- Companies pay higher rates on any residential property of £40,000 or more, other than a lease with more than 21 years left.
Unlike the main table, the higher rates table charges tax from the first pound. For completions from 11 December 2024 the rates are:
| Slice of the price | Higher rate |
|---|---|
| Up to £180,000 | 5% |
| £180,001 to £250,000 | 8.5% |
| £250,001 to £400,000 | 10% |
| £400,001 to £750,000 | 12.5% |
| £750,001 to £1,500,000 | 15% |
| Above £1,500,000 | 17% |
Where contracts were exchanged before 10 December 2024 and completion was later, the previous higher rates can usually still be used. If you buy a new main home before selling the old one, higher rates are paid at completion, and a refund can usually be claimed if the previous main residence is sold within 3 years of buying the new property. The WRA says a refund claim usually takes 15 to 20 working days to process.
How are non residential property and leases taxed?
Since 22 December 2020 the non residential rates have been 0% up to £225,000, 1% to £250,000, 5% to £1,000,000 and 6% above £1,000,000. The 6% top band has no equivalent in SDLT, where the non residential rate stops at 5%.
Rent under a non residential lease is taxed on its net present value: 0% up to £225,000, 1% to £2,000,000 and 2% above. SDLT uses a £150,000 nil band and a 1% band running to £5,000,000. Scottish leases are covered in LBTT on non residential leases.
How does LTT compare with SDLT and LBTT?
| Feature | LTT (Wales) | SDLT (England) | LBTT (Scotland) |
|---|---|---|---|
| Residential nil band | £225,000 | £125,000 | £145,000 |
| First time buyer relief | None | Nothing up to £300,000 | Nil band raised to £175,000 |
| Additional homes | Separate table, 5% to 17% | 5% added to each band | 8% of the whole price |
| Non UK resident surcharge | Not in the WRA rate tables | 2% | Not in the LBTT rate tables |
| Non residential top rate | 6% above £1,000,000 | 5% above £250,000 | 5% above £250,000 |
| Return and payment | 30 days | 14 days | 30 days |
Worked comparison
These figures apply each nation’s published bands to the same price for a buyer replacing their only home.
| Price | LTT | SDLT | LBTT |
|---|---|---|---|
| £235,000 | £600 | £2,200 | £1,800 |
| £875,000 | £49,250 | £33,750 | £63,350 |
On £875,000 the LTT is 6% of £175,000 (£10,500), 7.5% of £350,000 (£26,250) and 10% of £125,000 (£12,500). Wales is the cheapest of the three at £235,000 and sits between England and Scotland at £875,000.
Illustration only. An investor who already owns a home buys a £200,000 house in Cardiff to let. Higher rates LTT is 5% of £180,000 (£9,000) plus 8.5% of £20,000 (£1,700), so £10,700 is due.
When must the return be filed and the tax paid?
The return must be made within a 30 day period beginning on the day after the effective date, which is usually completion, and the tax must be paid by the same date. A return is still needed when no tax is owed, unless a specific exception applies. Under section 46, an acquisition other than a lease is not notifiable if the chargeable consideration, including linked transactions, is less than £40,000. Payment by BACS must be sent four working days before the due date. Late returns and payments can attract penalties and interest.
If too much tax has been paid, section 48 allows a repayment claim within four years after the filing date.
What mistakes come up most often?
- Assuming English first time buyer relief applies in Wales. It does not.
- Applying the higher rates only to the slice above £225,000. The higher table starts at 5% on the first pound.
- Overlooking property held for children under 18, or owned by a spouse, when deciding whether higher rates apply.
- Missing the 3 year refund window after buying a new home before the old one sells. If you also keep a former home and later sell it, the gain is a separate question; see selling a second home.
- Using an SDLT calculator for a property near the border. The address, not the buyer’s residence, decides which tax applies.
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Related Accountapedia entries
- SDLT, LBTT and LTT compared
- LTT on commercial property in Wales
- LTT higher residential rates in Wales
- LBTT on commercial property
- Additional Dwelling Supplement for companies
Sources
- Welsh Government: Land transaction tax overview
- legislation.gov.uk: Act of the Senedd 2017 c. 1
- Welsh Government: Land transaction tax returns and payments technical guidance
- Welsh Government: Land transaction tax rates and bands
- Welsh Government: Welsh government draft budget changes land transaction tax and landfil
- Welsh Government: Higher rates land transaction tax overview
- Welsh Government: Claim refund land transaction tax higher rates
- Welsh Government: Pay land transaction tax
- GOV.UK: Residential property rates
- GOV.UK: Nonresidential and mixed rates
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.