Check if you must pay the higher rates of Land Transaction Tax (LTT) when you buy a residential property in Wales.

Organisation:
First published:
19 June 2019
Last updated:

For residential property, there are 2 rates of LTT: main and higher. This guide outlines when and why the higher rates of tax apply.

The rates are set by the Welsh Government.

When you do not have to pay LTT

You will not have to pay LTT if you:

  • buy a property for less than £180,000 (and you do not own any other property)
  • buy a new lease for less than 7 years

When the higher rates apply

You will usually pay higher LTT rates when both of the following applies:

  • you buy a residential property worth £40,000 or more
  • you already own 1 or more other properties (see below)

Include any residential property that:

  • is owned on behalf of children under the age of 18 (parents are treated as the owners, even if the property is held through a trust and they are not the trustees)
  • you have an interest in as the beneficiary of a trust

If you’re married or in a civil partnership

The rules apply to both of you as if you were buying the property together, even if you’re not.

If higher rates apply to either of you individually, higher rates apply to the transaction as a whole.

Buying with someone else

The rules apply to each person buying the property (and their spouse).

If higher rates apply to any of you individually, higher rates apply to the transaction as a whole.

When the higher rates do not apply

You will not usually pay higher rates if:

  • you use your new property as your main home and have sold the last main home you owned before you buy your new home (or on the same day), or
  • any of the following apply to the property you’re buying:
    • is worth less than £40,000
    • a mixture of residential and non-residential space (like a shop with a flat above it)
    • is ‘moveable’ like a caravan, houseboat or mobile home
    • a freehold property with a lease on it which has more than 21 years left to run, held by someone unconnected to you

When and how to get a refund

If you sell your previous main home within 3 years of buying your new main home, you can usually apply for a refund.

This refund is the difference between the higher and main rates amounts.

If you buy a new main home but have not yet sold your old main home, higher rates will still apply to the transaction.

You cannot get a refund if:

  • you or your spouse or civil partner still own any part of your previous main home
  • the higher rates still apply to you for another reason

Reliefs and exceptions

You may qualify for a relief that reduces the amount of LTT you pay or an exception so you don’t have to pay.

If you buy more than 1 property, you may be eligible to claim multiple dwelling relief.

If you buy a property that consists of 2 or more dwellings, the subsidiary dwelling exception may apply.

If you're buying 6 or more properties, you can usually choose to pay either the:

  • non-residential rates of LTT, or
  • higher rates of LTT with multiple dwelling relief

More information

Higher rates are a complex area of the tax. This guidance does not cover all scenarios and should not be solely relied upon to work out whether you must pay any tax.

For a more detailed explanation, see our technical guidance.