Welsh Government announces changes to main residential LTT rates and bands

The Welsh Government announced on 27 September 2022 that the main residential rates of Land Transaction Tax (LTT) would change on 10 October 2022¹. The starting threshold for paying main residential rates of LTT increased from £180,000 to £225,000, and the first tax band covers transactions from £225,000 to £400,000 taxed at 6%¹.

The tax rates and bands for higher residential rate and non-residential transactions were unchanged from those effective from 22 December 2020¹. LTT replaced Stamp Duty Land Tax on residential and non-residential property and land interests purchased in Wales from 1 April 2018².

The Welsh Revenue Authority set out the transitional position for buyers completing around the change:

In most cases the previous rates can be used where contracts are exchanged before 10 October 2022 but the purchase is not completed until on or after that date¹. The authority published transitional guidance covering which rates apply to a transaction¹. Solicitors and conveyancers filing online who use the transitional rules are asked to disagree with the tax calculation generated, enter the tax due using the previous rates and bands, and select "transitional rules apply" as the reason for disagreeing with the calculation and explain how the calculation was reached¹. On a paper return, question 100 asks filers to select "transitional rules apply" if the transitional rules have been used to calculate tax based on the rates and bands for LTT before 10 October 2022¹.

Why it matters for households

The change affects people buying a home in Wales who pay the main residential rates of LTT, rather than the higher residential rates that apply in defined circumstances, such as buying an additional property. For a purchase completed on or after 10 October 2022, no main residential LTT is due on the portion of the price up to £225,000, where previously the threshold was £180,000¹. The first band above that threshold runs to £400,000 at 6%¹.

The date that matters is completion, not the date the price was agreed. A buyer who completes before 10 October 2022 pays the previous rates; one who completes on or after that date pays the new rates¹. Where contracts were exchanged before 10 October 2022 but completion falls on or after that date, the previous rates can be used in most cases¹. The rates and bands for higher residential rate and non-residential transactions did not change on 10 October 2022¹.

Separately, the higher residential rates changed for all bands from 11 December 2024, and legislation on multiple dwellings relief changed on 7 February 2025 so that subsidiary dwellings worth less than a third of the total transaction value must be treated as part of the primary dwelling in a main rates residential transaction². The Welsh Revenue Authority estimated that change would reduce the value of the relief, or increase total LTT revenues, by between £2.0m and £2.5m per year³.

What happens next

The Welsh Revenue Authority said it had updated its guidance and services, including guidance for tax professionals, and its LTT calculator, which uses the date entered to work out which rates and bands apply¹. The authority's published statistics on LTT reliefs and on higher rate refunds are next expected to be updated on 29 October 2026².