Stamp duty land tax in Wales – all change!


Are you acquiring property in Wales and are you aware that stamp duty land tax (“SDLT”) in Wales is changing with effect from 1 April 2018? From this date property transactions will be subject to a new land transaction tax (“LTT”) operated by the Welsh Revenue Authority instead of SDLT.


As a result a different amount of property tax will be payable on property transactions from April depending on whether the asset is located in England or in Wales – see table below.


Commercial property rates and bands


Purchase Price Wales (LTT) Purchase Price England (SDLT)
£0 – £150k 0% £0 – £150k 0%
£151k -£250k 1% £151 – £250k 2%
£251k – £1m 5% £251k + 5%
£1m+ 6%


Also note that for commercial leases in Wales the 2% rate will apply to any net present value above £2m, compared to £5m under the SDLT regime in England.


Residential property rates and bands


Purchase Price Wales (LTT) Purchase Price England (SDLT)
£0 – £180k 0% £0 – £125k 0%
£181k -£250k 3.5% £126k – £250k 2%
£251k – £400k 5% £251k – £925k 5%
£401k – £750k 7.5%
£751k – £1.5m 10% £926k – £1.5m 10%
£1.5m+ 12% £1.5m+ 12%


So for both commercial properties and residential properties a buyer will pay less tax in Wales compared to England on lower value properties and more tax on expensive properties.


Properties in Northern Ireland follow the SDLT regime for England.


Properties in Scotland are of course subject to a different regime being the Land and Buildings Transaction Tax, which came into effect on 1 April 2015, but it is similar to the SDLT regime. The key difference however is that for non-residential leases with an effective date on or after 1 April 2015 a tenant has to submit a further return every 3 years during the term of the lease and on termination of the lease.  Additional tax may then be due if there have been any changes which has to be paid within 30 days after the 3rd, 6th, 9th anniversary etc.  There may also be circumstances when a refund is due, e.g. due to a rent reduction, and the submission of the return is treated as an application for a refund from Revenue Scotland. Penalties will be imposed for late submissions of these 3 yearly returns even if no further tax is due.  Revenue Scotland will also charge interest on any tax that is late in being paid.   Note a submission has to be made even if there is no further tax to be paid.


Note that higher rates apply in all jurisdictions on the acquisition of a second home.


For further information please contact Linda Fletcher.