The “average first-time buyer” in Wales will not have to pay property tax when new rules are introduced in April next year, figures suggest.
The Land Transaction Tax (LTT) will replace the current Stamp Duty Land Tax in Wales in April 2018.
It means that a zero per cent tax rate will be charged on homes worth up to £150,000.
However, buyers purchasing homes worth over £400,000 may have to pay “significantly” more under the new rules.
Currently, first-time homeowners in England and Wales pay zero per cent on homes worth up to £125,000, two per cent on the next £125,000, five per cent on the next £675,000, 10 per cent on the next £575,000, and 12 per cent on any amount over £1.5 million.
The current rates of SDLT on residential properties in England and Wales
| Property or lease premium or transfer value | SDLT rates |
| Up to £125,000 | Zero |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
However, individuals and companies need to pay higher rates when they buy an additional residential property in England and Wales.
The current rates of SDLT on additional residential properties in England and Wales
| Property or lease premium or transfer value | Higher SDLT rates |
| Up to £125,000 | 3% |
| The next £125,000 (the portion from £125,001 to £250,000) | 5% |
| The next £675,000 (the portion from £250,001 to £925,000) | 8% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 13% |
| The remaining amount (the portion above £1.5 million) | 15% |
The new Welsh rates mean that someone buying a house in Wales for an average of £150,846 will save around £500, while nine out of 10 homebuyers will either pay the same or less tax.
Meanwhile, those buying a house worth £500,000 will be looking at paying around £2,500 more than they would have under the old SDLT system.
The new rates of LTT on residential properties in Wales
| Property or lease premium or transfer value | LTT rates |
| Up to £150,000 | Zero |
| £150,000 to £250,000 | 2.5% |
| £250,000 to £400,000 | 5% |
| £400,000 to £750,000 | 7.5% |
| £750,000 to £1,500,000 | 10% |
| More than £1,500,000 | 12% |
The Welsh Government has also confirmed that it will be retaining the surcharge for additional residential properties, currently charges at three per cent.
The new rates of LTT on additional residential properties in Wales
| Property or lease premium or transfer value | LTT rates |
| Up to £150,000 | 3% |
| £150,000 to £250,000 | 5.5% |
| £250,000 to £400,000 | 8% |
| £400,000 to £750,000 | 10.5% |
| £750,000 to £1,500,000 | 13% |
| More than £1,500,000 | 15% |
If you are buying, selling, letting, occupying or developing property the property tax team at RDP Newmans could help you make the best of the tax reliefs available to you. Chat to us today or come along to our office for an initial discussion about your property plans.