The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 received Royal Assent on 24 May 2017. The legislation is the first new Welsh tax law for almost 800 years and has been described by First Minister, Carwyn Jones, as a “significant step” for devolution.
As a result of the new legislation, from April 2018, Stamp Duty Land Tax ("SDLT") will be replaced in Wales with a new property tax called Land Transaction Tax (“LTT”). The rates of the new LTT for residential property which were announced by the Welsh Government on 3 October 2017, are as follows:
As with SDLT, those purchasing an additional residential property will be liable to pay an additional rate of tax at 3%. The threshold for paying LTT on residential transfers is higher than the threshold for paying SDLT, which no doubt will be welcomed by first-time buyers in Wales. The Welsh Government have commented, suggesting that nine out of ten homebuyers will pay the same or less under the new LTT, with the average purchaser saving £500.
There is an increase of tax on commercial property purchases worth more than one million pounds (up from 5% to 6%), which CBI Wales warned may affect future investments in Wales. However, new businesses and small to medium enterprises look to benefit under the new tax regime, with the LTT rates being lower than SDLT for purchases of commercial properties worth less than £250,000.
Whilst the new LTT is intended to broadly replicate SDLT, clients and practitioners will need to be aware of the different rates and what the changes mean for them.
We recognise that our clients in both England and Wales will probably need time to get to grips with the new LTT and this is something the team at Le Gros Solicitors would be happy to assist you with. If you have any queries regarding LTT please contact our office on 029 2036 8575 or email firstname.lastname@example.org