Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 6 paragraph 26

Classification of lease transactions as residential, non-residential or mixed

Schedule 6, paragraph 26 defines how a lease transaction is classified as residential, non-residential or mixed for the purposes of calculating land transaction tax on lease premiums and rent.

• A lease is a residential lease if the property it relates to consists entirely of residential property, and where there are linked transactions, every linked transaction also relates entirely to residential property.
• A lease is a non-residential lease if the property it relates to consists entirely of land that is not residential property, and where there are linked transactions, every linked transaction also relates entirely to non-residential land.
• A lease is a mixed lease if the property includes some land that is not residential, or where there are linked transactions and any one of those transactions includes some non-residential land.
• The classification matters because different tax rates and bands apply to residential, non-residential and mixed lease transactions.