The location of the residential property you are purchasing in England or Wales will determine whether you pay Land Transaction Tax (LTT) or Stamp Duty (SDLT)
The amount of LTT or SDLT paid depends on the purchase price and whether the Higher Rates or any reliefs apply
Payment of LTT and SDLT is required on completion of your purchase. Whilst the payment of LTT and SDLT is your responsibility, as part of the residential conveyancing process our Solicitors will file the LTT and SDLT return on your behalf.
Land Transaction Tax (Wales)
When you purchase a property in Wales, unless you have paid less than £40,000 for the property, you are required to file a Land Transaction Tax return. This is a form that must be filled out and submitted to the WRA (Welsh Revenue Authority) together with payment of the tax due within 30 days of the completion date of your purchase
Currently in Wales you do not have to pay LTT if the purchase price is £225,000 or less and the Higher Rates do not apply. If the purchase price is over this amount or the Higher Rates apply, the amount of LTT you pay is calculated on a percentage of the purchase price
Stamp Duty Land Tax (England)
When you purchase a property in England, SDLT applies in a similar way to LTT in Wales. You are required to submit a Land Transaction Tax return to HMRC if the purchase price is more than £40,000. Currently in England you pay SDLT if the purchase price is £250,000 or less (unless you are a first time buyer) and the Higher Rates do not apply. Again, the amount of SDLT paid is calculated on a percentage of the purchase price
The Land Transaction Tax return must be filed and payment of the tax due made within 14 days of the completion date of your purchase.
Higher Rates
If you own more than one property, the Higher Rates apply which are an increased percentage of LTT/SDLT calculated on the purchase price of the property.
If you are selling and buying it is important to synchronize both transactions if possible because the Higher Rates will apply if you do not complete the sale of your home on the same day as you purchase your new home
If it is not possible to complete your sale and purchase on the same day, there is provision for you to claim a refund of the Higher Rate paid provided you sell your property within specific time scales set by the WRA and HMRC
Our Solicitors are experts and are able to assist with all matters regarding residential conveyancing. If you are thinking of selling or purchasing a property, you can contact one of our Conveyancing Solicitors either through our online contact form on our website or by calling our offices on 02920 470909 (Cardiff) 01633 213411 (Newport), 01873 857555 (Abergavenny) for a non-obligation quote.