Land transaction tax (LTT) is the devolved equivalent of stamp duty land tax in Wales. It operates in a broadly similar way, but the Welsh Government has the power to set the rates and bands. The draft Budget document confirms that there is no intention to change the rates and bands for residential and non-residential property. However, there will be changes to other parts of LTT.

Firstly, a new “equalisation” rule will be introduced to the multiple dwellings relief rules. It appears this will provide for an adjustment where properties subject to a claim are chargeable at both the main and higher rates. More detail is expected next month. There will also be an increase in the minimum tax rule rate from 1% to 3%. This rule sets a floor so that the amount of tax collected cannot be less than the specified percentage. Finally, an additional refund rule will apply to higher rate transactions where a landlord leases the property to a local authority in Wales via the Leasing Scheme Wales. This will allow the buyer to obtain a refund of the additional charge in a similar way to someone replacing their main residence.

It is expected that, if approved, the changes will apply from April 2026.