Land transaction tax in Wales?

Land transaction tax in Wales?

12:06 PM, 9th January 2022, About 2 years ago 2

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I sold my home in Wales in March 2020, and I moved in with elderly parents who needed care during lockdown etc.

I paid support for my parents in their home, so I now wish to buy a neighbouring bungalow next to them which will cost me £260k, and I will pay cash.

I understand as I sold my own main residence in the last 3 years I do not have to pay the full amount of LTT on purchase as I am going to move into the bungalow as my main residence (I have to pay 3.5% on sum between £180k and £250k and then 5% on sum between £250k and £260K) which totals £2,950.

2 queries on this – query 1 – I also own several properties mortgage-free in Wales which are all let out and which I have never lived in – are these regarded as 2nd homes which would affect the LTT?

Second query, my only child owns his own property in England, but I was looking to put him on the deeds for a percentage on the bungalow, but it would seem if I do as he has a main residence already hen I would have to pay a very high rate of LTT on the full £260K – is this correct?

Any advice or suggestions would be welcome either to undertake prior to/during purchase or afterwards.


Editor Note >>

When the higher rates apply

You will usually pay higher LTT rates when both of the following apply:

  • you buy a residential property worth £40,000 or more, and
  • you already own 1 or more other properties (see below)

Include any residential property that:

  • is owned on behalf of children under the age of 18 (parents are treated as the owners, even if the property is held through a trust and they are not the trustees)
  • you have an interest in as the beneficiary of a trust

Buying with someone else

The rules apply to each person buying the property (and their spouse).

If higher rates apply to any of you individually, higher rates apply to the transaction as a whole.

When the higher rates do not apply

You will not usually pay higher rates if:

  • you use your new property as your main home and have sold the last main home you owned before you buy your new home (or on the same day), or
  • any of the following apply to the property you’re buying:
    • is worth less than £40,000
    • a mixture of residential and non-residential space (like a shop with a flat above it)
    • is ‘moveable’ like a caravan, houseboat or mobile home
    • a freehold property with a lease on it which has more than 21 years left to run, held by someone unconnected to you

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Neil Patterson

12:12 PM, 9th January 2022, About 2 years ago

Hi Jackie,

Please see my link and notes in the above article.

The only way of not paying the Stamp duty surcharge is if you are directly replacing your main residence that is being or has been sold in the last 3 years.

If any parties purchasing a property own another property that is not being sold then the surcharge is payable.

Grumpy Doug

20:24 PM, 9th January 2022, About 2 years ago

Neil, sorry but your post isn't clear, especially the last sentence that could cause confusion.
To clarify, replacing a main residence with another main residence does not attract the SDLT surcharge if completed within 3 years, irrespective of how many other investment properties are owned.
Re adding your son to the deeds, I'm sure that there are others who will come up with the right answers.

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