Welsh Stamp Duty
From April 2018, people living in Wales will now pay different Stamp Duty from the rest of the UK.
Stamp Duty, as Wales formerly knew it, has now changed over to Land Transaction Tax, also known as LTT. Just as before, you’ll pay Stamp Duty when you either buy or lease a house over a certain price.
How does it work?
You’ll only have to pay LTT if the house you’re buying is £180,000 or more. The amount of tax you’ll have to pay is worked out using a tier system, whereby the amount of tax you pay will depend on the price of the property.
Here are the different tiers of Land Transaction Tax you could be liable for:
Portion of the property price LLTRate
£0 - £180,000 0%
£180,001 - £250,000 3.5%
£250,001 - £400,000 5%
£400,001 - £750,000 7.5%
£750,001 - £1.5m 10%
For example, if you purchased a house at £400,000 you would pay £9,950 LTT, altogether. £2,450 of this is from the tax band £180k to £250k at 3.5%, and the remaining £7,500 will be from the band £250k to £400k at 5%.
Why has this change happened?
The Welsh government has stated that, “ 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 properties”.
Buy-to-let/second home properties
Those of you with second homes or buy-to-let properties will have to pay 3% more than the residential rates. Those properties over £400,000 are exempt from paying any tax.
First time buyers
Since November 2017, in the UK, first time buyers do not have to pay stamp duty on a property if it is less than £300,000. However, this is not the case now in Wales as there is no exemption to first time buyers under the new LTT legislation.
For further information on the costs you need to consider when buying a property, please get in touch with our helpful team of advisers. We can put you in touch with an adviser local to you who can offer flexible appointments. In the meantime, see how much you might be able to borrow with our handy borrowing calculator tool.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.