From 1st April 2018 Stamp Duty (SDLT) will be replaced in Wales with a new tax payable to the Welsh Assembly Government. This tax is called Land Transaction Tax (LTT).
The two taxes are broadly similar although slightly different rates are used. Most residential purchases up to £250,000 will mean a saving for purchasers of Welsh land when compared to SDLT.
Purchasers of Welsh land won’t pay any tax on properties up to £180,000, unless the property is a second home or a buy to let.
Generally speaking the amount of tax to be paid works out cheaper in Wales than in England, the difference varies depending on the purchase price but at the lower end of the market it can be over £1000 cheaper. For example buying a house in Wales for £180,000 would attract no LTT whereas the same house in England would attract £1,100 in SDLT.
First time buyers of properties priced over £180,000 will be slightly worse off, though, because there is no tax exemption in Wales (as there is under the SDLT). So, a first time buyer of a property for £250,000 in Chester will pay no SDLT. Conversely, a first time buyer of a property in Conwy for £250,000 will pay a LTT of £2,450.
The rates for Wales from 1st April are
The portion up to and including £180,000 0%
The portion over £180,000 up to and including £250,000 3.5%
The portion over £250,000 up to and including £400,000 5%
The portion over £400,000 up to and including £750,000 7.5%
The portion over £750,000 up to and including £1,500,000 10%
The portion over £1,500,000 12%
The rates for England are
Up to £125,000 0%
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
These rates are for residential purchases, 3% extra is charged on the whole amount in both cases for second homes. In England only a discount is given for first time buyers.
Our no obligation calculator takes into account all these rules and will give you the comparison figure between England and Wales, try it now
What happens to houses on the border between England and Wales?
They will be assessed on what percentage lies in each country, two tax returns will be needed and tax paid if necessary to both countries split by the percentage rate.
Can I still get a first time buyer discount?
Yes if your purchase is in England but no in Wales if you complete after 1st April 2018. The starting rate on which tax is payable is higher in Wales though.
What happens if I exchange contracts now but don't complete until after April?
The effective date will be the date on which the transaction is completed therefore if the property is in Wales you would pay LTT
Where can I find out more?
Land Transaction Tax
Stamp Duty Land Tax