The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026

If you are using this scheme to provide awards of subsidy, you must inform the Subsidy Control Unit – email: scu@gov.wales.

Wales

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026

The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 and The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (Amendments to Schedule 5) Regulations 2026.

The policy objective of the regulations is to help incentivise increased sign-up to Leasing Scheme Wales (LSW) and support provision of housing to Welsh local authorities for use as affordable rental accommodation, as part of tackling the impact of homelessness and use of temporary accommodation.

This subsidy scheme is being established to allow a refund of the higher residential rates element of Land Transaction Tax when an individual / private landlord buys a dwelling and then leases it to a Welsh local authority. The refund has been designed to ensure that leases granted to LAs under the LSW scheme qualify for the refund.

Welsh Government

Private housing sector – Private rent

• Real estate activities
• Accommodation and food service activities

13 February 2026 to 31 March 2031.

The maximum budget for the scheme value has been set at £15 million to ensure flexibility of operation if the refund is used more than estimated.

Tax measures (tax credit, or tax/duty exemption)

An individual / private landlord will be able to claim a refund of the higher residential rates element of Land Transaction Tax if the following conditions are met:

1. The dwelling is bought after the new rules come into force (CiF) but before 31 March 2031.
2. The consideration given for the any dwelling leased to the local authority (LA) does not amount to more than £400,000.
3. The taxpayer, within 18 months of the date of the purchase of the dwelling (that will be leased to the LA), grants a lease of the dwelling to a LA.
4. The lease is granted for a minimum period of 5 years but no more than 20 years, and the rent under the lease is no greater than the local housing allowance applicable to the dwelling leased to the LA.
5. Within 12 months of the lease being granted to a LA, the taxpayer makes a claim to the Welsh Revenue Authority (WRA) for the refund of the higher residential rates element.

The refund also includes a condition that requires the taxpayer to repay the refund in full if at any point in the first 5-years of the lease, the lease terminates before the 5th anniversary of it being granted (for example, by the original taxpayer exercising the LSW break clause).

Provide a refund of the higher residential rates element of Land Transaction Tax (HRRLTT) where an individual / private landlord, liable to the HRRLTT, buys a dwelling and then leases it to a Welsh local authority. The refund has been designed to ensure that leases granted to LAs under LSW qualify for the refund. The main residential rates of Land Transaction Tax would continue to apply to the transaction.

The consideration given for a dwelling has been capped at £400,000. For a £400,000 transaction the land transaction tax at the higher residential rates amounts to £29,950, with a main residential rates element of £10,500. Therefore, the maximum HRRLTT refund per property bought will be £19,450, based on the current LTT rates and bands: Land Transaction Tax rates and bands.

Whilst there is no limit on how many dwellings an individual or private landlord can apply to lease to a Welsh local authority through LSW, the maximum subsidy award value (as opposed to the subsidy scheme value) that can be cumulated by an individual or private landlord over a 3 financial-year period under this scheme has been set at £1 million.

For more information about applying for support under this scheme, please contact: taxstrategy.intergovernmentalrelations@gov.wales

For more information about this scheme’s compliance with the Subsidy Control Act 2022, please contact: