Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 6 paragraph 27

Residential leases: tax on rent

Schedule 6 paragraph 27 provides that no land transaction tax is currently chargeable on the rental element of a residential lease, but gives the Welsh Ministers power to introduce a tax on such rent in the future through regulations.

• No land transaction tax is currently payable on the rent portion of a residential lease — only the premium (if any) is subject to tax.
• The Welsh Ministers may, by regulations, introduce a method for calculating tax on residential lease rents, including rules for linked transactions involving multiple residential leases.
• If such regulations are made, they must set out tax bands with a zero rate band at the bottom and at least two further bands above it, each with a progressively higher rate.
• The regulations may specify different tax bands and rates for different categories of residential lease acquisition, and different commencement dates for each band or rate.