If you’re buying a home in Wales, you won’t pay Stamp Duty Land Tax (SDLT) like in England or Northern Ireland. Instead, the transaction is subject to Land Transaction Tax (LTT), which applies to most residential property purchases. This includes first homes, second homes, and buy-to-let investments.
How Land Transaction Tax Works
LTT is a Welsh property tax applied on the purchase price of a home. The rate you pay depends on the value of the property and whether it is your first home, second home, or an additional property.
- Standard LTT – For most home purchases, the tax increases in bands according to the property price.
- Second home LTT surcharge – If you already own another property, whether in Wales or elsewhere in the UK or abroad, an additional 4% surcharge applies on top of the standard LTT rates.
LTT only applies in Wales, and the rules and thresholds are set by the Welsh Government.
What are the current LTT Rates and Thresholds?
LTT rates and thresholds for residential property purchases in Wales for 2024-2025 are as follows:
| Property price | Standard LTT rate | Second home / additional property surcharge |
|---|---|---|
| Up to £225,000 | 0% | 0% |
| £225,001 – £400,000 | 6% | 10% |
| £400,001 – £750,000 | 7.5% | 11.5% |
| £750,001 – £1.5 million | 10% | 14% |
| Above £1.5 million | 12% | 16% |
Who has to pay the second home tax in Wales?
The LTT surcharge for additional residential properties applies when you already own one or more properties at the time of purchase. It generally affects buy-to-let investors, holiday home buyers, and homeowners purchasing a new property before selling their current one.
If you sell your previous property within 36 months of completing your new purchase, you may be eligible to claim a partial refund of the second home surcharge.
At Leading Property Lawyers (LPL), we help homebuyers navigate Land Transaction Tax, LTT surcharges, and all aspects of buying a property in Wales. Speak to our expert conveyancers today – call us on 0333 3055 249 or email info@leadingpropertylawyers.co.uk.
