LTT on second homes and buy-to-let in South Wales: the higher rates explained
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Quick answer: If you already own a residential property anywhere in the world and you're buying another one in South Wales or anywhere else in Wales — a second home, a holiday let, or a buy-to-let — you'll usually pay Land Transaction Tax's higher residential rates, not the main rates that apply to a straightforward home purchase. The higher rates use their own, higher band structure rather than the main-rate bands, and the gap is substantial: on a typical Cardiff purchase of £260,000, the higher rates work out at roughly £15,950 in LTT versus around £2,100 at the main rate on the same price. This guide sets out the current higher-rate bands, worked examples at typical Cardiff prices, and the situations — replacing your main home, buying jointly, moving between England and Wales — that change whether the surcharge applies, and when.
When the higher rates apply
The higher rates apply if, when your purchase completes (when the home becomes yours), you already own residential property (somewhere people live) worth £40,000 or more, anywhere in the world. They don't apply if the new home is replacing your only or main home. The higher rates catch:
- Buying a second home while keeping the home you live in.
- Buying a buy-to-let (a home to rent out), whether on your own, jointly, or through a company.
- Buying a holiday let.
If you're replacing your main home, the higher rates may not apply, depending on when you sell the old one. The timing rules are below.
The higher-rate bands, in full
These are the current higher rates of Land Transaction Tax, for purchases where contracts were exchanged (the deal became legally binding) on or after 11 December 2024:
Scroll sideways to see every column.
| Price band | Higher LTT rate |
|---|---|
| Up to £180,000 | 5% |
| £180,001 – £250,000 | 8.5% |
| £250,001 – £400,000 | 10% |
| £400,001 – £750,000 | 12.5% |
| £750,001 – £1,500,000 | 15% |
| Over £1,500,000 | 17% |
There's no 0% band under the higher rates. The main rates charge nothing on the first £225,000 (the "nil-rate band"), but on a second home or buy-to-let you pay tax from the very first pound. That's the biggest difference from buying your only home, and it catches out buyers who assume the tax-free band still applies to them. Our LTT vs stamp duty guide sets out the main rates in full if you want to compare, and our stamp duty Wales calculator works out both the main and higher rates on any price.
Worked examples at typical Cardiff prices
Scroll sideways to see every column.
| Purchase price | How it's taxed | Higher-rate LTT due |
|---|---|---|
| £180,000 | Fully within the 5% band | £9,000 |
| £260,000 | 5% on £180,000 + 8.5% on £70,000 + 10% on £10,000 | £15,950 |
| £325,000 | 5% on £180,000 + 8.5% on £70,000 + 10% on £75,000 | £22,450 |
At the main rate, that £260,000 home would cost £2,100 in tax: the first £225,000 is untaxed, and the remaining £35,000 is taxed at 6%. So you pay roughly £13,850 more purely because it's a second home or buy-to-let rather than your main home. Budget for that from the start, rather than finding out from your solicitor's final bill.
A Cathays or Roath terrace bought as a buy-to-let or HMO (a house in multiple occupation: a home let to several tenants from different households who share facilities) would pay these same higher rates. Our buy-to-let and HMO guide for Cathays and Roath covers the licensing and planning rules on top.
Replacing your main home: when the higher rates don't apply
If you're selling your only or main home and buying a new one to live in, the higher rates don't apply as long as you sell the old home on or before the day the new purchase completes. Land Transaction Tax treats this as replacing your main home, not buying an extra one.
The catch is timing. The test looks at what you own on the day your new purchase completes, not what you end up owning. If your old home hasn't sold by then, you'll be charged the higher rates at completion, because at that moment you own two properties. You can get a refund if you sell your old main home within 3 years. On a £260,000 purchase, that means finding roughly £13,850 more at completion than at the main rate, until the refund comes through.
Check the refund conditions and deadline with your conveyancer (the legal professional who handles your purchase) before completion. Getting the order wrong, or missing the refund deadline, can mean paying the higher rates for good on a purchase that was never really a "second home".
Buying jointly
Land Transaction Tax is worked out on the property as a whole, not per buyer, so two names on the deeds (the legal record of who owns it) doesn't split or reduce the bill. For the higher rates, what matters is whether either buyer already owns residential property. If one of you owns a home anywhere and the other is a first-time buyer, the higher rates can still apply to the whole purchase. The test looks at the buyers together, not one by one.
Moving between England and Wales
Land Transaction Tax and England's Stamp Duty Land Tax are completely separate. Owning a home in England doesn't exempt you from the higher rates on a Welsh purchase, or the other way round: the £40,000 test counts property anywhere in the world, not just in Wales. If you're moving to South Wales and buying here while still owning a home elsewhere, even briefly, budget for the higher rates unless and until you meet the replacing-your-main-home rule and its timing. If you're choosing where to live as part of the move, see our areas and prices guide, and get the tax bill worked out early.
Companies and trusts
Buy-to-let and HMO purchases through a limited company generally pay the higher rates too, in most cases even if it's the company's first property. Companies don't get the tax-free first £225,000 that an individual buying their only home does. Trusts (where someone holds property on behalf of others, the beneficiaries) can also be caught, depending on the type of trust and how the beneficiaries' property is treated. This depends heavily on the details, so get a conveyancer to confirm for your company or trust rather than assuming either way.
FAQ
Is there any nil-rate band under the higher LTT rates?
No. Unlike the main rates, the higher rates tax the price from the very first pound, at 5%. There's nothing like the main rates' tax-free £225,000 band.
Do I pay the higher rate if I'm selling my only home but haven't completed the sale yet?
Yes, at first. The test looks at what you own when your new purchase completes. If your old home is still unsold then, you'll be charged the higher rates, and you can usually claim a refund if you sell your old main home within 3 years. Check the refund conditions with your conveyancer.
Does buying through a limited company avoid the higher rates?
No. Company purchases generally still pay the higher rates, in most cases however many other properties the company already owns.
Higher LTT rates and bands checked directly against gov.wales in July 2026 (rates effective for contracts exchanged on or after 11 December 2024), and the rules on replacing a main home in October 2026. Rates, bands and reliefs are set by the Welsh Government and can change at future budgets — always confirm current rates on gov.wales, or with your conveyancer, before exchanging contracts. This guide is general information, not a personal recommendation or tax advice.
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