Welsh government increases Land Transaction Tax on additional properties by 1%

The Welsh government has announced that, from today, the higher residential rates of Land Transaction Tax applying to purchases of additional residential properties will increase by 1%, raising an estimated additional £7 million in 2025-2026. 

For properties up to and including £180,000 the new rate will be 5%, rising to 8.5% for properties between £180,000 and £250,000, 10% for transactions between £250,000 and £400,000, 12.5% up to £750,000, 15% up to £1,500,000, and 17% over£1,500,000. 

The tax rates and bands for main residential rates and non-residential transactions are unchanged. 

The change is broadly in line with changes made to stamp duty in England and Northern Ireland. In its first Budget, Labour increased the stamp duty surcharge for second homes by 2% to 5% from 31st October 2024.

Tim Thomas, policy and campaigns officer at Propertymark, commented: “Propertymark is disappointed that Land Transaction Tax for additional properties has increased by 1%. The investment in affordable and social homes is welcome, but until social housing supply keeps up with demand, we called for the surcharge on additional properties to be cut to stimulate supply in the private rented sector.

“However, is encouraging that the Welsh Government has listened to our call for fair funding for local authorities in Wales given the requirements of enforcing the Renting Homes (Wales) Act and proposed Building Safety Act. This increase in funds must be used for these additional legislative challenges for the housing sector."