Starting threshold for main residential LTT rises to £225,000 in Wales

The Welsh Government announced on 27 September 2022 that the main residential rates of Land Transaction Tax (LTT) would change on 10 October 2022¹. From that date 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.

The Welsh Revenue Authority, which collects and manages LTT, set out the rates in force from 10 October 2022¹:

Source: Welsh Tax Policy Report 2025²

Transitional rules applied to purchases completing around the change. The Welsh Revenue Authority said buyers completing before 10 October paid the previous rates of tax, and those completing on or after 10 October paid the new rates¹. In most cases the previous rates could be used where contracts were exchanged before 10 October 2022 but the purchase was not completed until on or after that date¹. Solicitors and conveyancers filing returns under those rules were told to disagree with the generated tax calculation, enter the tax due using the previous rates and bands, and select "transitional rules apply" as the reason; paper returns used the same option under question 100¹.

The Welsh Government's 2025 tax policy report records the change among the LTT revisions of recent years, noting that the rates payable on higher residential rates transactions were increased by 1 percentage point for each band with effect from 11 December 2024, and that no other changes to rates and thresholds were made during that year². LTT replaced Stamp Duty Land Tax on residential and non-residential property and land interests purchased in Wales from 1 April 2018³. Taxpayers must notify the Welsh Revenue Authority of all land transactions with a value above £40,000, and the organisation filing a return has 30 days after the effective date to submit and pay it³.

Why it matters for households

The threshold change affects anyone buying a main home in Wales whose purchase price falls between the old and new starting points. A main residential purchase completed on or after 10 October 2022 at a price above £180,000 but no more than £225,000 falls in the 0% band, where previously tax was charged from £180,000¹. Above £225,000, the 6% rate applies to the portion of the price from £225,000 to £400,000, with higher bands above that². The change applies to main residential rates only: higher residential rates, which apply in defined circumstances such as buying an additional property, and non-residential rates were unchanged from 22 December 2020¹. The date of completion determines which rates apply, and the exchange date can determine the rates used under the transitional rules¹. For higher rates paid on a purchase that later becomes a main residence, the taxpayer has up to three years to sell their previous main residence and claim a refund, and a successful claim amends the original transaction to a main rate residential transaction³.

What happens next

No further change to the main residential starting threshold has been reported beyond the 10 October 2022 increase¹. The Welsh Government's 2025 report states that the rates payable on higher residential rates transactions rose by 1 percentage point for each band from 11 December 2024, and that no other changes to LTT rates and thresholds were made during that year². The report also records that the Welsh Government intends to set the Welsh Rates of Income Tax for 2026-27 at 10p, maintaining current levels, subject to confirmation by the Senedd².