Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 5 paragraph 23

Consequences of a transaction ceasing to be a higher rates residential property transaction

Schedule 5 paragraph 23 sets out what happens when a land transaction ceases to attract the higher rates of Land Transaction Tax because the buyer has sold their previous main residence, including how to reclaim any overpaid tax and the time limits for doing so.

• When a buyer sells their previous main residence within the required period, the original purchase ceases to be a higher rates transaction, but the sale of the old home cannot be used again to remove higher rates from any other transaction.
• If the old home is sold before the tax return filing date and the return has not yet been filed, the buyer can simply file the return at the standard (non-higher) rates as though the purchase had always been a replacement of their main residence.
• If the return has already been filed and higher rates tax paid, the buyer can either amend the return within the normal amendment period or make a formal repayment claim to recover the overpaid amount.
• Special time limits apply for repayment claims where an extended disposal period applies: generally 12 months from the date of the disposal, or 12 months from 12 July 2024 where the disposal took place between 1 April 2021 and 11 July 2024.