Land Tax Blog

Stamp Duty in Wales: The Land Transaction Tax Explained

Written by Owain Banfield
Written by Owain Banfield
29th March 2018 (Last updated on Wednesday 17th October 2018)

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 removal 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.

So, without further ado, what exactly is Land Transaction Tax?

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).

As the graph below shows, 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 or the same than Stamp Duty.
Check out the different rates below.

Land Transaction Tax Rates

Portion of House PriceLand Transaction Tax Rate
Up to £180,0000%
£180,001 to £250,0003.5%
£250,001 to £250,0005%
£400,001 to £750,0007.5%
£750,001 to £1.5 million10%
£1.5 million+12%

Stamp Duty Tax Rates

Portion of House PriceStamp Duty Rate
Up to £125,000 0%
£125,001 to £250,0002%
£250,001 to £925,0005%
£925,001 to £1.5 million10%
£1.5 million+12%



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.


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.


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.


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.

*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)
AreaHouse 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

£560

£0

£560


Saving Money When Moving

Our research shows that the Land Transaction Tax will benefit the average house buyer across all of Wales. The average house buyer in 18 counties of Wales would pay Stamp Duty, but using the same average house prices, the average home buyer in only 3 Welsh counties would pay Land Transaction Tax.

Average home buyers in areas like Powys will save £1,095, which is a substantial amount when moving into a new house and every penny counts. We've updated our Cost of Moving House Calculator to include Land Transaction Tax, so movers in Wales stay fully informed of the costs involved with moving house.

Remember to use Compare My Move when the time comes to move, and save up to 70% on your house removal costs. Fill in a quick and easy form and get connected with up to 6 professional removal companies, verified by us and reviewed by you.

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