Land tax is changing in Wales from April 2018 when Stamp Duty Land Tax will be replaced by Land Transaction Tax (LTT).
As a result of the recent Land Transaction Tax Bill, LTT will apply to both residential and non-residential transactions within Wales and represent a progressive tax by which higher-priced properties will attract an overall higher tax rate. These rates are:
Although LTT will be implemented in April 2018, it is assumed there will be a transitional period for property transactions straddling the removal of SDLT and the introduction of LTT, however there is yet no clarification as to what those transitional arrangements will be.
The LTT Bill has also highlighted more stringent anti-avoidance rules as the Welsh Government looks to clamp down on tax avoidance transactions. There will remain relief from payment available for certain activities, including (but not limited to) sale and leaseback; incorporation of LLPs; charities; acquisitions by public bodies and health bodies; and compulsory purchase.