Land Transaction Tax (LTT) is a tax on property transactions in Wales. It was introduced on April 1, 2018, replacing the Stamp Duty Land Tax (SDLT) in Wales. LTT is administered by the Welsh Revenue Authority (WRA) and is applicable on the purchase or lease of land or property.

Key Points of Land Transaction Tax (LTT):

1. Scope: LTT applies to residential and non-residential property transactions, including leases.
2. Who Pays: The tax is payable by the purchaser or the tenant in the case of a lease.
3. When to Pay: The tax must be paid within 30 days of the effective date of the transaction, which is typically the completion date.

Current Rates (as of 2024):

Residential Property Rates

• Up to £225,000: 0%
• £225,001 to £400,000: 6%
• £400,001 to £750,000: 7.5%
• £750,001 to £1,500,000: 10%
• Over £1,500,000: 12%

Additional Residential Property Rates

• Up to £225,000: 4%
• £225,001 to £400,000: 10%
• £400,001 to £750,000: 11.5%
• £750,001 to £1,500,000: 14%
• Over £1,500,000: 16%

Non-Residential Property Rates

• Up to £225,000: 0%
• £225,001 to £250,000: 1%
• £250,001 to £1,000,000: 5%
• Over £1,000,000: 6%

Non-Residential Lease Rates

• Up to £225,000: 0%
• £225,001 to £2,000,000: 1%
• Over £2,000,000: 2%

These rates are applied to different bands of the property price, meaning that only the portion of the price within each band is taxed at the corresponding rate. The progressive nature of these rates ensures that more expensive properties incur higher taxes.

For instance, if you purchase a residential property for £500,000:

• The first £225,000 is taxed at 0%.
• The next £175,000 (from £225,001 to £400,000) is taxed at 6%.
• The remaining £100,000 (from £400,001 to £500,000) is taxed at 7.5%.

Calculating the total LTT for this example:

• 0% on £225,000 = £0
• 6% on £175,000 = £10,500
• 7.5% on £100,000 = £7,500

Total LTT = £10,500 + £7,500 = £18,000

For more detailed calculations and scenarios, consulting with the Welsh Revenue Authority or a tax advisor is recommended.