Stamp duty in Wales to be overhauled: The winners and losers

4 October 2017

Nine out of 10 home buyers in Wales will either pay the same property tax or will be better off when a new land transaction tax is introduced next year.

Land transaction tax (LTT), which comes into effect on 1 April 2018 in Wales, replaces stamp duty land tax, which is currently applied in England, Northern Ireland and Wales.  

Under the new system, the starting threshold for paying property tax will be £150,000 – compared with £125,000 at present.

In the latest UK House Price Index for July, the average price of a property in Wales was £150,846 – just above the new property tax limit.

Under the new rules, announced as part of the Welsh government budget for 2018-19, all buyers of residential properties costing up to £400,000 will pay the same or less tax than they currently do, with the average buyer paying almost £500 less tax than they do under stamp duty land tax.

However, buyers looking for homes on the upper band rates between £400,000 and £925,000 will pay more than at present. For example, a buyer purchasing a property in Wales for £400,000 would currently pay 5% stamp duty, but this will rise to 7.5% under the new rules.

The additional tax for buying a second property will remain the same – at 3% on top of each band.

New land transaction tax rates in Wales from April 2018:

Price threshold                              Main residential rates

£0 - £150,000                                  0%

£150,001 - £250,000                      2.5%

£250,001 - £400,000                      5%

£400,001 - £750,000                      7.5%

£750,001 - £1.5 million                    10%

Above £1.5 million                           12%

Current stamp duty rates in England & Wales:

Price threshold                              Main residential rates

£0 - £125,000                                  0%

£125,001 - £250,000                      2%

£250,001- £925,000                        5%

£925,001- £1.5 million                     10%

Above £1.5 million                           12%

Note: In both cases, it is a tapered system so, for example, if you currently buy a house for £275,000, the stamp duty you will owe is: 0% on the first £125,000, 2% on the next £125,000 and 5% on the next £25,000, totaling £3,750.

Mark Hayward, chief executive of NAEA Propertymark, welcomes the changes, even though he admits it’s not good news for all house buyers.

“The rate up to which buyers won’t have to pay any stamp duty will be £150,000 from 2017 – the same value as the average house price in Wales. This means a huge number of house buyers will no longer have to pay any stamp duty at all. However, the move creates further bands for properties in excess of £250,000, and those properties will now attract a higher rate of stamp duty land tax than they would have previously.”


In reply to by anonymous_stub (not verified)

Are there any changes to the tax on buying 2nd homes for property developers .

In reply to by anonymous_stub (not verified)

HelloWe are in our sixtys not working as ill health.We are buying a new built in Wales at a cost of 199.995 completion July 2018.Will we have to pay stamp duty.??????regardsPeter

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