People buying property in Wales will now pay different rates of stamp duty from those in the rest of the UK – but who will be best off?
The Welsh government has used its devolved powers to scrap stamp duty land tax and replace it with land transaction tax (LTT).
Find out how much you’ll pay with our LTT calculator, and use our table to see whether it will cost you more or less than if you were buying in England, Northern Ireland or Scotland.
Welsh stamp duty (LTT) rates
LTT is tiered in the same way that stamp duty is. This means you’ll pay different rates of tax on different portions of the property price.
You can see the new LTT rates in the table below. Scroll using the arrows to find out how these compare to stamp duty, which now only applies in England and Northern Ireland, and LBTT, the Scottish equivalent.
So, why is Wales introducing a different property tax system?
The government states: ‘Any changes have been made to either simplify the tax; make it fairer; improve its efficiency and effectiveness; or to enable a focus on Welsh needs and priorities.’
- Find out more: Land Transaction Tax (LTT)
You can find out how much LTT you’ll pay on a Welsh property using our LTT calculator. Note that this is for people buying a property intended as their main residence – if you’re purchasing a second/holiday home or a buy-to-let property, an extra 3% will apply to each band.
Is Welsh LTT cheaper or more expensive than English stamp duty?
This depends on the price of the property you’re buying.
In Wales, you’ll be exempt from LTT altogether if the property you’re buying costs £180,000 or less. By way of comparison, stamp duty in England and Northern Ireland (NI) applies to any property costing over £125,000 – unless you’re a first-time buyer (see below).
The first band of tax is charged at a higher rate in Wales (3.5%) than in England and NI (2%). However, due to the differing levels at which the tax kicks in, home movers buying a £250,000 property will pay almost the same amount regardless of which country they live in – £2,450 in Wales and £2,500 in England and NI.
If you’re buying at the pricier end of the scale, you’ll pay significantly more in Wales. For example, a £750,000 home in Wales will incur a £36,200 LTT charge, while the stamp duty on an equivalent property in England and NI would be £27,500.
- Find out more: how to buy a house
LTT and stamp duty for first-time buyers
Since November 2017, first-time buyers in most of the UK haven’t had to pay any stamp duty at all on properties costing £300,000 or less, and they get a discounted rate if their property costs between £300,000 and £500,000.
However, there isn’t any exemption for first-time buyers under the Welsh LTT system.
The discounted first-time buyer stamp duty rates were introduced to encourage more buyers to market – and new stats from the National Association of Estate Agents (NAEA) indicate that they may be starting to take effect.
In February 2018, 29% of home purchases were made by first-time buyers. This is the highest proportion since February 2015, when they stood at 30%. In 2016, only 24% of sales were made to first-timers.