Land transaction tax (LTT) is a tax on the purchase or lease of land and buildings in Wales. LLT may be due at the higher residential tax rates on the purchase of residential property where the purchaser:
- is an individual who already owns a residential property (eg, the property is intended to be a second home or a buy-to-let property); or
- is not an individual (eg, a company).
The higher residential rates will increase by 1 percentage point for transactions with an effective date of on or after 11 December 2024, as follows:
| Rate from 22 December 2020 to 10 December 2024 | Rate from 11 December 2024 | |
|---|---|---|
| First £180,000 | 4% | 5% |
| Next £70,000 | 7.5% | 8.5% |
| Next £150,000 | 9% | 10% |
| Next £350,000 | 11.5% | 12.5% |
| Next £750,000 | 14% | 15% |
| Remainder over £1,500,000 | 16% | 17% |
The Welsh government has also announced that changes will be made in 2025 to LTT multiple dwellings relief (MDR) to ensure that MDR claims are not allowed where the subsidiary dwelling exemption is applied. The Welsh government says that it will “continue to monitor the use of MDR” having consulted on its possible abolition in April 2024.
Other announcements from the Budget include the following:
- Income tax. No changes will be made to the Welsh rates of income tax for 2025/26.
- Landfill disposal tax (LDT). For 2025/26, the standard rate of LDT will rise to £126 and to £6.30 per tonne for the lower rate. The standard rate is in line with the UK government’s increase in the standard rate of landfill tax.
- Non-domestic rates. The non-domestic rates multiplier will be capped at 1%, and retail, leisure and hospitality businesses will continue to receive 40% relief towards their bills, for 2025-2026.
Further information
- Welsh government press release: A budget to build a bright future for Wales
- Welsh tax policy report 2024
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