Land transaction tax (LTT) in Wales

On 8 April 2024, the Welsh Government launched a consultation on changes to the land transaction tax (LTT) regime. The LTT regime is for purchases of land and property interests located in Wales. The proposed changes include:

1. The abolition of LTT multiple dwellings relief (MDR) from 1 June 2024 – or as soon as possible thereafter

The UK Government announced in the 2024 Spring Budget plans to abolish stamp duty land tax (SDLT) MDR in England. The plan will come into force from 1 June 2024. This will result in a reduction to the Welsh block grant.

2. If MDR is abolished, the abolition of the six or more dwellings provisions also

Existing provisions mean that, when purchasing six or more dwellings in a single transaction, the taxpayer can choose to pay the non-residential rates of LTT.

3. Extending LTT relief for local authority social housing

Lastly, the Welsh Government propose a tax relief for Welsh local authorities when purchasing property for use as social housing.

The consultation also asks whether any other LTT rules or reliefs should be considered for review.

All the suggested changes to the LTT regime follow the UK Government’s announcements at the Spring Budget to abolish MDR for SDLT purposes. This will affect property purchases in England and Northern Ireland from 1 June. These changes will likely mean higher taxes payable on the purchase of multiple residential properties in future.

Views on the aforementioned changes are invited by 19 May 2024. It is a much shorter than usual consultation period to reflect the urgency of some of the issues. The Welsh Government will then publish a summary of responses and next steps.

The consultation documents and response forms are available in full via the Welsh Government’s website.

Please contact us should you require any advice on LTT or SDLT. Our highly experienced property taxes team are happy to assist.