How do I choose a letting agent?.
What’s Land Transaction Tax? By Kieran McNeff Owner and Director of Chancery Properties
Welsh Stamp Duty – Land Transaction Tax explained
Land transaction tax (LTT) was introduced by the Welsh Assem- bly Government in 2018 in a bid to make Stamp Duty fairer to Welsh home buyers, as Wales enjoys low- er average house prices than those of England. It generally mirrors Stamp Duty in that it’s a tiered tax paid upon completion of a property purchase, with different tax bands per portion of property value.
Prior to the Covid-19 pandemic, you would only pay tax on a prop- erty purchase over £180,000 where that property will be your main residence, however this thresh- old has been temporarily raised to £250,000 in an effort to boost the housing market. For the time be- ing, this has removed a tax of 3.5%
that would be charged on houses sold between 180,001 and 250,000, but it is set to return to the origi- nal rates in July 2021. This po- tentially means that completing on a house purchase before 30th June could’ve saved you thousands.
With second or additional homes however, you will have to pay the higher residential rates of LTT. If you already own a prop- erty and choose to buy another worth more than £40,000, your LTT bill will start from 4% climb- ing with each tier of value. This is definitely something that needs to be considered when looking at an investment property but is of- ten overlooked as you can be busy thinking of all of the other expenses that come with buying property.
Whether it’s a first home, or the lat-
est added to your portfolio, if you have LTT to pay, this is due within 30 days of the day after you’ve complet- ed. Even if you have no LTT to pay, you still need to complete a ‘return’ within this time. This is most often completed by your solicitor, howev- er it is your responsibility to ensure the return is completed on time.
For the moment, everything seems to be pointing to LTT returning to the pre-Covid system from 1st July 2021, however this may yet be ex- tended further. If you’re thinking of buying or selling a property within South Wales, whether you’re trying to get on the property ladder or a few rungs away from the top, we can help you. Just get in touch with our property experts on 029 2021 3244, emailing enquiries@chan-
ceryproperties.co.uk or by visiting us at
Chanceryproperties.co.uk.
30 / PROPERTYMAIL
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