Consultation on Land Transaction Tax reliefs

The Welsh Government has published a consultation on proposed changes to Land Transaction Tax (LTT) reliefs, which include the abolition of Multiple Dwellings Relief (MDR) from 1 June 2024.

House with garage

Proposals intended to be put to the Senedd, on which views are now sought, are:

  • The abolition of Land Transaction Tax (LTT) Multiple Dwellings Relief (MDR) from 1 June 2024.
  • The extension of the existing LTT relief when purchasing property for social housing purposes to Welsh local authorities. It is intended that this extended relief will be broadly the same as that currently provided to registered social landlords.

On 6 March 2024, the UK government Announced its decision to abolish Stamp Duty Land Tax (SDLT) MDR in England from 1 June 2024. The consultation states that this will result in a reduction to the Welsh Block Grant. It is anticipated the proposed abolition of LTT MDR would broadly offset the impact of the Welsh Block Grant on the abolition of SDLT MDR.

Transitional rules, similar to those introduced for the abolition of SDLT MDR, are proposed for the planned LTT MDR abolition. The subsidiary dwelling exception will remain.

Views are also invited on other possible LTT changes, namely:

  • The abolition of the LTT relief provided on the purchase of six or more dwellings in a single transaction.
  • The potential review or amendment of other LTT reliefs.
  • The possible impact of the proposals above on opportunities to use the Welsh language and on not treating the Welsh language less favourably than English.

The consultation closes on 19 May 2024. Responses can be given online, by e-mail or by post.

Consultation questions

Question 1.1:  Do you agree the proposal to abolish LTT MDR set out in this consultation aligns with the Welsh Government’s tax principles?

Question 1.2: Do you think the abolition of LTT MDR will negatively impact the private rented sector in Wales?

Question 1.3: Do you think the abolition of LTT MDR will negatively impact any others in Wales?

Question 2.1: Do you agree the proposal to abolish the 6 dwellings rule, alongside the abolition of LTT MDR, would align with the Welsh Government’s tax principles?

Question 2.2: Do you think the abolition of the 6 dwellings rule, alongside the abolition of LTT MDR, would discourage or prevent buyers from entering into multiple-dwelling transactions?

Question 2.3: Do you think the abolition of the 6 dwellings rule, alongside the abolition of LTT MDR, would negatively impact the private rented sector in Wales?

Question 2.4: Do you think the abolition of the 6 dwellings rule, alongside the abolition of LTT MDR, would negatively impact others in Wales?

Question 3.1: Do you agree the proposal to extend LTT relief to Welsh LAs when purchasing property for use in social housing aligns with the Welsh Government’s tax principles?

Question 3.2: Do you agree that the current rules should be amended to provide broadly the same relief to Welsh LAs currently provided to registered social landlords?

Question 3.3: Do you agree that the impact outlined above would occur?

Question 3.4: Do you think the proposal to extend LTT relief to Welsh LAs when purchasing property for use in social housing would negatively impact anyone in Wales?

Question 3.5: Would the change described in consultation issue 3 be beneficial in terms of supporting housing plans for your local authority?

Question 4.1: With the Welsh Government’s aims and objectives in mind, are there other LTT rules, including reliefs, which you feel should be considered for review, for instance, to support the Welsh Government’s housing commitments?

Question 5.1: Do you think that there are opportunities to promote any positive effects?

Question 5.2: Do you think that there are opportunities to mitigate any adverse effects?

Question 5.3: In your opinion, could the proposals be formulated or changed so as to have positive effects or more positive effects on using the Welsh language and on not treating the Welsh language less favourably than English?

Question 5.4: In your opinion, could the proposals be formulated or changed so as to mitigate any negative effects on using the Welsh language and on not treating the Welsh language less favourably than English?

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 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 link

Welsh Government: Public consultation on land transaction tax reliefs