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Stamp Duty in Wales: The Land Transaction Tax Explained

Martha Lott

Written by

17th Sep 2021 (Last updated on 29th Sep 2021) 4 minute read

On 1st April 2018, Stamp Duty was be replaced by Land Transaction Tax in Wales, saving the average home buyer £560. But what exactly are the differences between Stamp Duty and Land Transaction Tax? And who stands to win and lose from the changes? Luckily, house removals experts Compare My Move are here to explain all.

We’ll explain the difference between the two rates, and explore how the changes affect every area in Wales. We’ll even highlight how much the average house buyer will save in every area of Wales, with the help of our newly updated Cost of Moving House Calculator.

This article will cover the following:
  1. Stamp Duty and Land Transaction Tax Compared
  2. Land Transaction Tax Rates
  3. The Land Transaction Tax Winners
  4. The Land Transaction Tax Losers
  5. Second Home Owners and Land Transaction Tax
  6. How Much Will Land Transaction Tax Save You?
  7. How Much Will Land Transaction Tax Save You?
  8. Next Steps of Buying a House

Stamp Duty and Land Transaction Tax Compared

Stamp Duty and Land Transaction Tax function the same, in that both have different rates for different proportions of a house’s price. The main difference is that the lower threshold for 0% has been raised to £180,000 for Land Transaction Tax, compared to £125,000 for Stamp Duty. As the current average house price in Wales is £153,034, this effectively means the average house buyer in Wales won’t pay any rate (a saving of £560).

Land Transaction Tax favours lower priced houses, before being near enough the same as Stamp Duty up until £402,000. This is the point that the rates intersect, and Land Transaction Tax becomes more expensive that Stamp Duty.

So simply, if your property is below £402,000, Land Transaction Tax will be cheaper than, or the same as Stamp Duty. Check out the different rates below or use our updated for 2019/2020 Stamp Duty Calculator.

Land Transaction Tax Costs

Land Transaction Tax Rates


Portion of House PriceLand Transaction Tax Rate
Up to £180,0000%
£180,001 to £250,000
3.5%
£250,001 to £250,000
5%
£400,001 to £750,000
7.5%
£750,001 to £1.5 million
10%
£1.5 million+
12%

Stamp Duty Tax Rates

Portion of House Price
Stamp Duty Rate
Up to £125,000
0%
£125,001 to £250,000
2%
£250,001 to £925,000
5%
£925,001 to £1.5 million
10%
£1.5 million+
12%


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The Land Transaction Tax Winners

The average homebuyer in Wales will save £560 when the Land Transaction Tax replaces Stamp Duty, but there are some areas that benefit even more.

With the current average house price in Wales at £153,034, the average homebuyer would have paid £560 in Stamp Duty before the change. Under the new Land Transaction Tax rules, the average homebuyer would pay no rate on this purchase.

Areas with average house prices close to the new 0% threshold of £180,000 see the biggest savings. For example the average housebuyer in Powys paying £179,789 will pay no Land Transaction Tax, saving £1,095 against Stamp Duty.

Check out a breakdown of savings below.

Land Transaction Tax Savings by Area

The Land Transaction Tax Losers

Home buyers will be worse off by the new Land Transaction Tax if purchasing a property worth more than £402,000. At this point, Land Transaction Tax overtakes Stamp Duty, and from here the gap only widens. For example, a £1,000,000 property costing £61,200 in Land Transaction Tax, compared to £43,750 in Stamp Duty. So the biggest losers from the change are buyers purchasing multi-million pound houses.

It's worth noting that areas with low average house prices see no change. For example the average buyer in Merthyr Tydfil would be under the threshold for both rates.

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Second Home Owners and Land Transaction Tax

Those looking to purchase a second home face the higher rate of Stamp Duty, and this is no different for Land Transaction Tax. But as both system's higher rates simply add 3% to every bracket, second home owners are actually better off buying in Wales for certain prices homes. Much like those buying one home, second home owners will pay less than the equivalent Stamp Duty if the property is less than £402,000. For properties more expensive than this, Land Transaction Tax is substantially more than Stamp Duty.

To learn more, read stamp duty on second home.

How Much Will Land Transaction Tax Save You?

Here we break down the savings every area of Wales will see from the change from Stamp Duty to Land Transaction Tax.

Breakdown of Costs in Wales

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How Much Will Land Transaction Tax Save You?

Here we break down the savings every area of Wales will see from the change from Stamp Duty to Land Transaction Tax.


Area
House Price*Stamp Duty**Land Transaction Tax***Amount Saved****

Blaenau Gwent

£83,078

£0

£0

£0

Bridgend

£148,951

£479

£0

£479

Caerphilly

£128,127

£62

£0

£62

Cardiff

£200,082

£1,501

£702

£799

Carmarthenshire

£140,271

£305

£0

£305

Ceredigion

£179,419

£1,088

£0

£1,088

Conwy

£158,474

£669

£0

£669

Denbighshire

£145,712

£414

£0

£414

Flintshire

£167,673

£853

£0

£853

Gwynedd

£148,891

£477

£0

£477

Isle of Anglesey

£178,247

£1,064

£0

£1,064

Merthyr Tydfil

£96,947

£0

£0

£0

Monmouthshire

£245,080

£2,401

£2,277

£124

Neath Port Talbot

£111,418

£0

£0

£0

Newport

£165,013

£800

£0

£800

Pembrokeshire

£166,374

£827

£0

£827

Powys

£179,789

£1,095

£0

£1,095

Rhondda Cynon Taf

£103,588

£0

£0

£0

Swansea

£142,592

£351

£0

£351

Torfaen

£129,710

£94

£0

£94

Vale of Glamorgan

£217,955

£1,859

£1,328

£531

Wrexham

£153,384

£567

£0

£567

Wales£153,034£567£0£560

*AVERAGE HOUSE PRICES TAKEN FROM OFFICE FOR NATIONAL STATISTICS HOUSE PRICE INDEX JANUARY 2018 (RELEASED MARCH 2018)
**STAMP DUTY DUE BEFORE APRIL 2018 FROM HOUSE PRICE, CALCULATED USING COMPARE MY MOVE COST OF MOVING CALCULATOR
***LAND TRANSACTION TAX DUE FROM HOUSE PRICE, CALCULATED USING COMPARE MY MOVE COST OF MOVING CALCULATOR
****DIFFERENCE IN COST (AMOUNT SAVED)

Next Steps of Buying a House

This article has been part of our home buying guide. In our next article, we look at buy-to-let properties. To learn more, read buy-to-let property advice.

Martha Lott

Written by Martha Lott

Having written for Huffington Post and Film Criticism Journal, Martha now regularly researches and writes advice articles for everything moving house related.