SL(6)268 – The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) (Amendment) Regulations 2022

Background and Purpose

These Regulations amend the Land Transaction Tax (Tax Bands and Tax Rates) (Wales) Regulations 2018 so as to insert revised tax bands and percentage tax rates for residential property transactions.

The table below sets out the revised bands and rates:

Tax band	Relevant consideration	Percentage tax rate
Zero rate band	Not more than £225,000	0%
First tax band	More than £225,000 but not more than £400,000	6%
Second tax band	More than £400,000 but not more than £750,000	7.5%
Third tax band	More than £750,000 but not more than £1,500,000	10%
Fourth tax band	More than £1,500,000	12%

These Regulations also provide that where the effective date for a transaction falls on or after 10 October 2022, but contracts were exchanged or substantial performance of that contract took place prior to 10 October 2022, the buyer may elect to apply the relevant tax bands and percentage tax rates that were in place before the changes came into force (subject to certain exceptions).

Procedure

Made Affirmative.

The Regulations were made by the Welsh Ministers before they were laid before the Senedd. The Senedd must approve the Regulations within 28 days (excluding any days when the Senedd is dissolved or in recess for more than four days) of the date they were made for them to continue to have effect.

Technical Scrutiny

No points are identified for reporting under Standing Order 21.2 in respect of this instrument.

Merits Scrutiny  

The following point is identified for reporting under Standing Order 21.3 in respect of this instrument:

1. Standing Order 21.3(i) - that it imposes a charge on the Welsh Consolidated Fund or contains provisions requiring payments to be made to that Fund or any part of the government or to any local or public authority in consideration of any licence or consent or of any services to be rendered, or prescribes the amount of any such charge or payment.

Section 25 of the Tax Collection and Management (Wales) Act 2016 provides that the Welsh Revenue Authority must pay amounts collected in the exercise of its functions into the Welsh Consolidated Fund.

These Regulations revise tax bands and percentage tax rates for residential property transactions subject to Land Transaction Tax collected by the Welsh Revenue Authority.

Welsh Government response

A Welsh Government response is not required.

Legal Advisers

Legislation, Justice and Constitution Committee

17 October 2022