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Changes to Stamp Duty Land Tax in England and Land Transaction Tax in Wales

Posted on October 12th 2022

When purchasing a property or land in England, you are required to pay a form of tax to the government called ‘Stamp Duty Land Tax’ (SDLT). In Wales, the equivalent tax is known as ‘Land Transaction Tax’ (LTT) and is the tax paid to the Welsh government when buying a property in Wales.

The amount of SDLT or LTT that you pay will depend on several things, including the price of the property being purchased, when the property is purchased, whether you are eligible for relief or an exemption as a first-time buyer and whether you are purchasing a residential property.

For those who already own one property and are wanting to purchase a second property, for example for the purpose of letting it out, higher residential rates will apply for both SDLT and LTT.

The rate of SDLT in England

On 23rd September 2022 the Government introduced changes to the SDLT as part of their mini budget. In most cases, those looking to purchase a property in England will now be paying less stamp duty. There is no stamp duty payable on the first £250,000 of the price of the property. Stamp duty is then charged at different rates on properties between £250,001 and over as shown below.

Standard SDLT Rates from 23rd September 2022:

Property Price: SDLT Rate:
Up to £250,000 0%
Between £250,001 and £925,000 5%
Between £925,001 and £1,500,000 10%
Over £1,500,000 12%

SDLT for First-time Buyers

First time buyers can further benefit from the change to stamp duty as there is no stamp duty payable on the first £425,000 if you are buying your first home. For property prices between £425,001 and £625,000, stamp duty is then charged at a rate of 5%. For any purchase over £625,001, relief is not claimable.

First Time Buyer SDLT Rates from 23rd September 2022:

Property Price: SDLT Rate:
Up to £425,000 0%
Between £425,001 and £625,000 5%

 

Stamp duty is payable at the point of completion and is due to HMRC within 14 days of completion.

The rate of LTT in Wales

From the 10th October 2022, there are changes to the rates of LTT, meaning that less LTT will be payable in most cases.

The starting threshold for LTT has risen from £180,000 to £225,000, meaning there is no LTT payment due on properties purchased up to £225,000. Properties between £225,001 and £400,000 will be taxed at 6% of the purchase price. As the price increases for a property then more tax will be payable as shown below.

Standard LTT Rates from 10th October 2022

Property Price: SDLT Rate:
Up to £225,000 0%
Between £225,001 and £400,000 6%
Between £400,001 and £750,000 7.5%
Between £750,001 and £1,500,000 10%
Over £1,500,000 12%

 

LTT is payable at the point of completion and is due to the Welsh Revenue Authority within 30 days of completion.

If you would like to discuss how the tax changes will affect you, or if you would like to discuss your conveyancing needs, please give us a call on 01244 312306 or contact us here, and we will be happy to assist you.

 

Call and speak to a member of our team on 01244 312306