Changes to main residential rates and bands for Land Transaction Tax

Changes for residential property transactions in Wales

From 10 October 2022:

• the starting threshold for paying main residential rates of LTT will increase from £180,000 to £225,000
• the first tax band will cover transactions from £225,000 to £400,000 taxed at 6%

The tax rates and bands for higher residential rate and non-residential transactions are unchanged from those effective from 22 December 2020.

Rates and bands

We’ve updated the page on rates and bands set by the Welsh Government, and our calculators.

You can use our Land Transaction Tax calculator to help you work out how much tax to pay. The calculator will use the date you enter to work out which rates and bands apply.

Transitional rules

If the buyer completes on buying a property:

• before 10 October you pay the previous rates of tax
• on or after 10 October you pay the new rates of tax

In most cases, the previous rates can be used where contracts are exchanged before 10 October 2022, but the purchase is not completed until on or after this date.

We have transitional guidance for October 2022 main residential rates change. This expands on the regulations and covers which rates will apply to a transaction.

As a solicitor or conveyancer to file a return online showing you’re using transitional rules

1. Disagree with the tax calculation generated.
2. Enter the tax due calculated using the previous rates and bands.
   You can use our tax calculator to help you calculate the tax due, but you should use the exchange date as the effective date so that the calculation is made using the correct rates and bands.
3. Select ‘transitional rules apply’ as the reason for disagreeing with the tax calculation and explain how you came to your calculation.

If you’re filing a paper return

Under question 100, please select ‘transitional rules apply’ if you have used the transitional rules to calculate the tax based upon the rates and bands for LTT before 10 October 2022.

Support and information

We’ve updated our guidance and services, including specific guidance for tax professionals.

If you have a transaction query, please contact us.