A landlord’s guide to Land Transaction Tax

If you want to buy a rental property in Wales, you’ll need to pay a type of stamp duty called Land Transaction Tax (LTT).

As with stamp duty in England, buyers of second properties in Wales have to pay higher rates of Land Transaction Tax than standard buyers.

Read on to find out how Land Transaction Tax works for landlords in Wales, including the latest rates and thresholds.

Stamp duty in Wales – what is Land Transaction Tax?

Land Transaction Tax replaced stamp duty in Wales during 2018. It’s a very similar system to stamp duty in England, but with different thresholds and rates.

LTT is paid by all buyers of land or property over a certain price, including landlords when they buy a rental property.

Buyers pay more LTT the higher the price of their property. It’s a progressive tax, meaning you pay an increasing tax rate for each portion of the property purchase price.

LTT can be a significant cost for buyers of second homes, so it’s important to factor it into your budget before you buy a rental property.

Having its own stamp duty system means Wales is able to set tax rates for buying property in line with average house prices in the country. For example, according to the official UK House Price Index, the average property price in Wales was £223,000 in August 2024. This is compared to £310,000 in England and £200,000 in Scotland.

LTT is paid by the buyer of a property to the Welsh government, rather than to HMRC.

Read more: A complete guide to landlord tax

Stamp duty on Wales second homes – how does it work?

If you’re buying a home in Wales that’s not your main residence, you’ll need to pay a higher LTT rate.

Buyers of second properties start paying LTT at a lower threshold and at higher rates. This means landlords buying rental properties will need to pay higher tax bills than the average buyer.

You can claim back the higher rate of LTT if you make a second home your main residence within 36 months of buying it (e.g. if you sell your existing main residence).

It’s also worth noting that you won’t need to pay Land Transaction Tax in the unlikely event you buy a second property for less than £40,000.

Land Transaction Tax rates – how much is stamp duty in Wales?

Here’s an overview of the LTT rates for buyers of second properties and buyers of a main residence. These rates and thresholds have been in place since 10 October 2022.

Higher Welsh Land Transaction Tax rates

Property price	Second home LTT rate
Up to £180,000	4%
£180,001 to £250,000	7.5%
£250,001 to £400,000	9%
£400,001 to £750,000	11.5%
£750,001 to £1.5 million	14%
Above £1.5 million	16%

Standard Welsh Land Transaction Tax rates

Property price	Standard LTT rate
Up to £225,000	0%
£225,001 to £400,000	6%
£400,001 to £750,000	7.5%
£750,0001 to £1,500,000	10%
Over £1,500,000	12%

Landlord Land Transaction Tax example

If a landlord buys a rental property in Wales for £375,000 they’ll pay:

four per cent on the first £180,000 = £7,200
7.5 per cent on the price between £180,001 and £250,000 = £5,250
nine per cent on the price between £250,001 and £375,000 = £11,250
total LTT bill = £23,700

The effective tax rate for this purchase would be 6.32 per cent.

To put it into perspective, a buyer of a main residence for £375,000 would pay just £9,000 at an effective tax rate of 2.40 per cent.

However, Welsh landlords have it slightly better than those buying in England, who would pay £25,000 in stamp duty on a £375,000 purchase.

Land Transaction Tax calculator

The Welsh government website has a stamp duty tax calculator you can use to work out how much Land Transaction Tax you could owe when buying a rental property.

How to pay Land Transaction Tax

When you buy a property, your solicitor can file your LTT return on your behalf. They’ll need to pay it to the Welsh Revenue Authority (WRA) online and it must be paid within 30 days of completion.

If you fail to submit a Land Transaction Tax return and pay on time, you could be hit with penalties and interest charges by the WRA.

Land Transaction Tax multiple dwellings relief

You can claim tax relief if you buy multiple properties in the same transaction.

This is known as multiple dwellings relief (MDR) and applies to properties such as:

two neighbouring houses
a house with a cottage in its grounds
a house with an annexe

To be eligible for MDR, each dwelling in the transaction must be considered standalone. This means it will need:

independent access
a kitchen area
a bathroom
space to live and sleep

MDR is a partial tax relief. It can be calculated by dividing the total purchase price by the number of properties in the transaction. The LTT is then paid on the average figure.

Do you have any unanswered questions on Welsh Land Transaction Tax? Let us know in the comments.

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Stamp duty in Wales – a landlord’s guide to Land Transaction Tax