Welsh government plans to tweak relief for buyers
The draft Welsh Budget 2026/27 confirmed there would be no changes in the rates of land transaction tax. However, it did reveal some related changes are being planned. What’s the full story?
Land transaction tax (LTT) is the devolved equivalent of stamp duty land tax in Wales. It operates in a broadly similar way, but the Welsh Government has the power to set the rates and bands. The draft Budget document confirms that there is no intention to change the rates and bands for residential and non-residential property. However, there will be changes to other parts of LTT.
Firstly, a new “equalisation” rule will be introduced to the multiple dwellings relief rules. It appears this will provide for an adjustment where properties subject to a claim are chargeable at both the main and higher rates. More detail is expected next month. There will also be an increase in the minimum tax rule rate from 1% to 3%. This rule sets a floor so that the amount of tax collected cannot be less than the specified percentage. Finally, an additional refund rule will apply to higher rate transactions where a landlord leases the property to a local authority in Wales via the Leasing Scheme Wales. This will allow the buyer to obtain a refund of the additional charge in a similar way to someone replacing their main residence.
It is expected that, if approved, the changes will apply from April 2026.
Related Topics
-
Corporation tax return filing deadline
-
Don’t overlook the partial exemption annual adjustment
As VAT year ends approach for many businesses, HMRC’s guidance highlights the need to carry out the partial exemption annual adjustment. This is often overlooked but can have a direct impact on recoverable VAT. What do you need to check?
-
MONTHLY FOCUS: USING YOUR COMPANY TO DIVERT INCOME TO FAMILY MEMBERS
Operating a business through a limited company is less tax-efficient than it used to be. However, it can still be a very useful way of diverting income to other family members. In this Monthly Focus, we look at the methods, and associated considerations, involved in doing this.