In April 2018, stamp duty was replaced by land transaction tax for properties that are bought in Wales.
This is a tax that property buyers have to pay, unless the purchase price is below the threshold which currently stands at £180,000 for residential properties and £150,000 for non-residential land and properties.
In this blog post, we’ve discussed the charges of LTT and the different thresholds to which the charges apply. It can be quite confusing, especially as the thresholds have changed over the years, but we hope to shed some light upon this important topic as it can play a big part in your affordability and budget.
Below, is a table explaining the rate of LTT charges against the property purchase price for residential properties.
|Minimum property purchase price||Maximum property purchase price||Rate of land transaction tax|
Here’s an example of how LTT would be calculated on a property with the purchase price of £300,000:
There would be a Tax charge of 3.5% on the £70,000 that falls between £180,001 and £250,000 and a Tax charge of 5% on the £50,000 that falls between £250,001 and £300,000. Meaning that the total LTT charge would be £4,950.
Remember, the LTT charge is additional to the purchase price of £300,000, meaning you’ll pay £304,950. It’s important that you take into consideration LTT before formally offering on a property to ensure that you can afford the property once LTT has been added.
Do you still have unanswered questions? If you need more advice or guidance on Land Transaction Tax, please don’t hesitate to get in touch with us today on 01352 734802 or drop us an email at [email protected], we’d be happy to help! In the meantime, why not check out our properties.