The Welsh Government has launched two new Land Transaction Tax (LTT) consultations. The first explores extending the LTT higher rates three-year exception and refund period, in specific circumstances. The second consultation looks at introducing LTT relief for special tax sites, such as Freeports and Investment Zones. 


Proposals to amend the refund and exception rules 

Higher residential rates of Land Transaction Tax (LTT) are charged on the purchase of a dwelling, where the purchaser already owns an interest in another dwelling. Refunds and exceptions can apply for up to three years from the date of the new purchase.

The consultation now published seeks views on proposed new rules which will extend this three-year period in cases where the transaction has been impeded by fire safety defects or prevented by emergency restrictions. 

In 'Purchase Before Sale' (PBS) scenarios, it is proposed that the three-year period to claim refunds or exceptions will be extended: 

  • So that taxpayers may claim a refund on all qualifying transactions taking place from 1 April 2018, where the sale of a former main residence was impeded due to issues relating to fire safety defects. 
  • For all transactions taking place once the new rules come into force, where the sale of a former main residence was prevented by emergency restrictions.
    • This second change will not apply to transactions affected by restrictions imposed before the rules come into force, such as during the COVID pandemic.

In 'Sale Before Purchase' (SBP) scenarios, it is proposed that: 

  • The three-year period will be extended for all transactions taking place once the new rules come into force where the purchase of a new main residence is prevented by emergency restrictions.

The new rules will not provide an extension to the three-year exception period for SBP transactions impeded by fire safety reasons.

Responses may be submitted online, or by post, until 17 March 2024 

Proposed LTT special tax sites relief 

The second LTT consultation seeks views on proposed amendments to provide relief from LTT for qualifying transactions of land within a designated Welsh special tax site.

This will include qualifying transactions within Welsh Freeports and, where appropriate, Investment Zones in Wales. 

Relief from LTT will be available where a buyer enters into a qualifying land transaction, in the period the relief is granted, where the relevant land or building is situated within a designated Welsh special tax site and is used, or is intended to be used, in a qualifying manner.

It is intended that the LTT relief will be broadly equivalent to the Stamp Duty Land Tax (SDLT) relief offered to special tax sites in England, save for six proposed changes:

  • LTT relief can only be claimed in relation to land within the designated special tax site.
  • Caretaker or security staff accommodation, despite being residential development, is to be considered incidental to the use for qualifying purposes and therefore qualifies for relief in all situations.
  • LTT relief will use a marginally tighter definition of ‘excluded rents’ compared to Stamp Duty Land Tax (SDLT).
  • LTT relief related to alternative finance arrangements will not follow SDLT in making a ‘relevant person’ liable to file the further return and pay LTT should the relief need to be withdrawn.
  • LTT relief will provide withdrawal rules so they will not apply where the person who has claimed relief has disposed of substantially all their economic interest in the land.
  • LTT relief will address situations where an assignment of a lease should, as in other cases, sometimes be treated as the grant of a lease.

Responses to the consultation may be submitted online, by email, or by post, until 18 February 2024 

Useful guides on this topic

Welsh Land Transaction Tax (LTT)
What is Land Transaction Tax? How does it operate? What reliefs are available? 

Welsh LTT Rates
What are Welsh Land Transaction Tax (LTT) Rates? How do you calculate Welsh Land Transaction Tax?

Welsh LTT vs SDLT: Comparing the rates and additional dwellings charge
How does Welsh Land Transaction Tax (LTT) compare to Stamp Duty Land Tax (SDLT)? What are the key similarities and differences?

External links

Consultation: Land Transaction Tax Higher Residential Rates: proposals to amend the refund and exception rules

Consultation: Land Transaction Tax Special Tax Sites Relief

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