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Welsh Land Transaction Tax

The Welsh Government has announced an increase in the nil rate threshold for Land Transaction Tax on residential properties. 

For completions on or after 27 July 2020 the nil rate band increases from £180,000 to £250,000 – the new rate applies until 31 March 2021.  The existing rates will apply to transactions which complete before 27 July – a difference in LTT liability of £2,450 for a property costing more than £250,000.  This may well lead to purchasers delaying completions to benefit from the lower LTT liability.

Importantly the LTT surcharge for additional residential properties will continue to apply following the increase in the nil rate threshold.  This means for additional properties a 3% rate will apply on the purchase price up to £180,000 and a 6.5% rate on the purchase price between £180,000 and £250,000.

The move follows the increase in the nil rate band for SDLT in England and Northern Ireland to £500,000.  While the Welsh changes are not as generous it is to be hoped they provide a welcome boost to the housing market in Wales.

 

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