Glossary: Land Transaction Tax statistics

Taxpayers must notify the WRA of all land transactions with a value above £40,000. There are also circumstances where certain lease transactions are not notifiable if they are less than 7 years in duration. For further information, see paragraph LTTA/6030 in our LTT technical guidance.

The purchaser of a property has 30 days following the effective date of the transaction to file their return and pay any LTT due  We can only present statistics on the transactions reported to us and this may include data on transactions which were not notifiable.

The amount of LTT due is calculated for notifiable transactions that have been submitted to WRA. It's calculated using LTT tax rates and tax bands, which vary depending on the type of transaction.

The tax due will generally relate to the information on the tax return. It’s not the same as the tax payments received, which may arrive up to 30 days, or more in the case of late returns, after the transaction takes place.

To calculate the amount of tax due, the purchase price of the transaction (also called the consideration) is collected on the tax return. 

Where a freehold is being purchased, in most cases, the consideration is the purchase price of the property. In certain cases, the market value of the property will be entered rather than the price paid. 

For residential leasehold purchases the consideration takes the form of a premium, which is usually the value of the property. 

However, for newly granted non-residential leases, the consideration represents the premium to acquire the lease. Where rent is payable under the terms of the lease, the rental figures will be used to calculate the net present value of the lease, which is taxed.

Further guidance on the net present value is available at paragraph LTTA/4080 in our LTT technical guidance.

These are purchases of residential property. Residential property is defined as:

• a building, or part of a building, that is used or suitable for use as one or more dwellings, or is in the process of being constructed or adapted for such use
• land that is or forms part of the garden or grounds of such a building (including any building or structure on such land), and
• an interest in or right over land that subsists, or is to subsist, for the benefit of such a building or such land.

Residential transactions can either be at the:

• main rates: usually where the buyer does not already own any other dwellings, or where the buyer is replacing their main residence, and
• higher rates: usually where the buyer already owns other dwellings, or the buyer is not an individual (for example, a company)

For further information, see paragraph LTTA/1050 in our LTT technical guidance.

These are any transactions that are not residential, such as transactions involving shops, offices, or agricultural land.

WRA statistics on non-residential transactions also include properties that are not wholly residential (namely, properties which have both residential and commercial elements).

For further information, see paragraph LTTA/1060 in our LTT technical guidance.

Reliefs can be claimed on both residential and non-residential transactions. Reliefs reduce the amount of tax due when certain conditions are met. It should be noted that multiple reliefs can be applied to a single transaction. Reliefs may reduce the tax due to zero (known as a full relief) or by a certain percentage or amount or by applying a different calculation method (known as a partial relief). 

The most common reliefs claimed are typically: 

• group relief
• reliefs for acquisitions involving multiple dwellings
• charity relief

More information on each of the reliefs and when they apply can be found in published guidance on the WRA website.

Information on which transactions are linked to each other should be provided by the taxpayer on the tax return,. Where the WRA is not provided with this information, this can affect the quality of our analysis on linked transactions within our wider data. In particular, this can affect our reliefs analysis. We explain this further in our quality information for LTT statistics.

For further information on linked transactions, see the published guidance on the WRA website.

If within three years of completing a higher rates LTT transaction, the buyer sells their previous main residence, they may be eligible for a refund of the higher rates element of LTT. The purchased dwelling must have been bought to be a replacement for the taxpayers previous main residence.

For further information on higher rates of LTT and refunds, see the published guidance on the WRA website.

Higher rates of LTT apply to an individual buying a property as a new main residence, where they’ve not sold their previous residence at the time of purchase. But if the taxpayer sells their former main residence within 3 years, the individual is eligible for a refund of the higher rates element of the tax. In these cases, the transaction is changed to main rates residential at the point the refund is claimed. 

In any given year’s statistics, only some refunds will have already been claimed. So, some higher rate transactions will eventually leave the count in subsequent years. We will not know the full extent of the outstanding bridging in the latest year for up to 4 years, including the allowed additional year for the claim itself. 

We publish a range of statistics for higher rates transactions, including the total revenue raised and the number of refunds made each month. At a local area level, we publish the annual percentage of residential transactions for which the higher rates apply.

Various dates are used in WRA statistics to present data over time.

Effective date

This is when the tax becomes liable to be paid, usually when a transaction is completed on a property.
 
We present data in our statistical releases primarily based on the effective date of the transaction. Whilst using the effective date in analysis can lead to greater volatility in the data (for example, due to a change in taxation rates), and revisions in successive releases and data reports, this date relates to the point at which the transaction took place and not a notional future date when the tax return was received. This also means that the series created from our analysis will reflect changes in tax rates and policy at the time that any changes take place.

For further information, see paragraph LTTA/1040 in our LTT technical guidance. 

Submitted date

This is the date when a tax return is submitted to the WRA. Other statistical publications in the UK use submitted date to produce their statistics. Therefore, we have included some comparable statistics on submitted date in our previous annual statistics. We also include statistics on weekly transactions by submitted date in our monthly and quarterly LTT statistics.

Cut-off date

LTT returns can be submitted at any time. When producing our monthly and quarterly LTT statistics, we use the third Monday of the month as the ‘cut-off date’. New returns or amendments received after this time are not included in our statistics published in that month.

Refund approval date

On the StatsWales website, we include some statistics on higher rate refunds by the date when the refund was approved by the WRA.