Wales land tax higher rate question

curtis122

Can someone please explain the Wales Land tax as we have found a house in Wales we like. We have been onto the Wales Land tax website and worked out our Land tax bill but we have just read that if we own another property we will fall under the Higher Land tax charge.

Can someone please explain this as we are now worried as this will mean we cannot buy what could be our dream home.

Our situation-

We have sold our main residence and are looking at a property in Wales to be our new main residence for £640,000. We also have a BTL in England and have had it for around 20 years.

Will we fall under the higher tax level? Its quoting 60k if that's the case rather then 28k. This does not seem fair given we have already bought the BTL and paid stamp duty on it.

user1977

Where did you “just read” what you said above? I’d expect the Welsh Revenue website to explain that you’d have the relief which applies where you’re replacing your main residence.

curtis122

It does explain on the main residence but its not very clear if its still the case if you own a BTL. We did a general search in Google and some answers came up as yes we would then come under the higher rate but then some also said no quoting the main residence information which is why I've come on here to get an answer if anyone knows for sure.

curtis122

I've also read this which apparently comes from the Wales site when entering the question into Google -

Replacement rules: The rule that lets you avoid higher rates when "replacing a main residence" only works if you sell your previous main residence at the same time as (or just before) you buy the new one, or if you sell it within a 3-year window after buying a new one while transitioning. Because you already sold your old home and spent time renting, that specific replacement chain is broken for this new purchase.

We sold our home in March and have currently been renting since looking for our new main home. As mentioned we have a BTL which we have owned for he last 20 years.

timjim

It says on the Wales.gov website

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)

It doesn't state how long before is

(my bold)

user1977

If you go through the questionnaire here it will tell you that you're not liable (as long as you buy within three years of your sale):

https://www.gov.wales/check-if-you-need-pay-higher-rate-land-transaction-tax

curtis122

This is the problem, its a bit ambiguous.

gov.uk for Stamp Duty in England is more clear they state -

If you’re replacing your main residence

You will not pay the extra 5% SDLT if both of the following apply:

• the property you’re buying is replacing your main residence
• your previous main residence was sold within 36 months of completing your new purchase

curtis122

user1977… thank you, thats more clear and asks more questions