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In the draft budget, on 21 December 2020, the Welsh Government announced changes to the higher residential rates, and non-residential rates and bands, of Land Transaction Tax (LTT). The temporary increase to the nil rate band of LTT for residential property transactions will end on 31 March 2021.

First published:
21 December 2020
Last updated:

Changes for higher rates residential property

The higher residential rates of LTT will increase by 1% across all bands on 22 December 2020.   

If you complete on buying a property:  

  • before 22 December you pay the previous rates of tax  
  • on or after 22 December you pay the new rates of tax  

In most cases where you have already exchanged contracts, but not completed you will be able to use the previous higher rates.  

We’ve updated our higher rates quick guide.

Changes for non-residential property 

On 22 December 2020:

  • the zero-rate band of the tax charged for lease premiums and assignments, and freehold property transfers will increase from £150,000 to £225,000
  • the zero-rate band of the tax charged on the rent element of non-residential leases will increase from £150,000 to £225,000

The Welsh Government have also announced that they intend to increase the 'relevant rent' amount for the annual rent element of non-residential rents from £9,000 to £13,500 in February 2021.

End of temporary reduction period 

The Welsh Government have confirmed that the temporary increase to the nil rate band of LTT for residential property transactions will end on 31 March 2021. This means on 1 April 2021, these rates will revert to the original rates and starting threshold of £180,000. You must complete your purchase before this date to use the temporary reduction rates. 

Rates and bands 

We’ve updated the rates and bands page and our official tax calculator to include the new rates that come into effect on 22 December 2020. The date you enter into the calculator decides which rates and bands it uses.

Support and information 

We’ve updated our LTT guidance and services. If you have a transaction query, please contact us.

Our helpdesk phone lines will be closed from 3pm on Wednesday 23 December 2020 until 10am on Monday 4 January 2021. 

Use our online contact form and we’ll get back to you as soon as possible after reopening on 4 January.

If you’re a tax professional see our guidance on the LTT rates and bands changes announced in December.