Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 14 paragraph 2

Housebuilder acquisition of old dwelling — relief conditions

Schedule 14 paragraph 2 sets out the conditions under which a housebuilder can acquire an individual's existing home free of land transaction tax, and explains how partial relief works when the land exceeds the permitted area.

• Full tax relief applies when a housebuilder buys an individual's old dwelling as part of a linked deal in which the individual purchases a new dwelling from the same housebuilder, provided the individual lived in the old dwelling within the last two years, intends to live in the new one, and the land does not exceed the permitted area.
• If all conditions are met except that the land exceeds the permitted area, partial relief applies — the taxable consideration is reduced to the difference between the market value of the whole old dwelling and the market value of the permitted area alone.
• The two transactions must be entered into in consideration of each other, meaning they form a linked exchange arrangement between the individual and the housebuilder.
• References to acquisitions of the old and new dwellings mean the grant or transfer of a major interest (such as a freehold or lease), and market values relate to that major interest.