Buying a second home or holiday let in Wales can be a great investment, but it’s crucial to understand the costs, especially Land Transaction Tax (LTT), also known as stamp duty. Whether you’re buying for personal use or as a business venture, knowing how LTT applies will help you plan effectively.
If you’re a current holiday let owner, or thinking of buying a second home in the future, this guide covers everything you need to know about second home stamp duty, including rates, exemptions, and how it applies to holiday lets, helping you plan your holiday letting business venture with confidence.
Carry on reading to find out more about stamp duty on second homes in Wales...
What is Stamp Duty?
Land Transaction Tax (LTT) replaced Stamp Duty Land Tax (SDLT) in Wales in 2018. It is a progressive tax applied to property purchases, with different rates depending on the price of the property and its purpose. If you’re buying a second home or an additional property, you’ll face higher tax rates due to an additional property surcharge.
The rates are progressive, meaning you only pay the higher rate on the portion of the property price above a given threshold.
How Does Land Transaction Tax (LTT) Apply to Second Homes?
LTT is the tax you pay when buying property in Wales. It applies to both residential and commercial properties and must be paid within 30 days of completing the purchase

Current LTT Rates for Second Homes & Holiday Lets in Wales
In Wales, there is an additional property surcharge applied to the purchase of second homes and holiday lets. This surcharge is 4% on top of the standard LTT rates. Read more about land transaction tax rates and bands on the Welsh Government website.
So, for any property considered an additional property (i.e., a second home or holiday let), the total LTT rates will include this surcharge. As of January 2025, the Land Transaction Tax (LTT) rates for second homes and holiday lets in Wales, including the 4% additional property surcharge, are as follows:

(Source: Welsh Government)
How LTT Is Calculated
LTT is calculated on a tiered basis, meaning different portions of the property price are taxed at different rates. For example, let’s calculate the LTT for a second home purchased at £300,000:
- First £180,000: 5% of £180,000 = £9,000
- Next £70,000: 8.5% of £70,000 = £5,950
- Next £50,000: 10% of £50,000 = £5,000
Total LTT Payable: £9,000 + £5,950 + £5,000 = £19,950
Non-Residential and Mixed-Use Property Rates:
For non-residential (commercial) and mixed-use properties, the LTT rates differ. They are:
- Up to £225,000: 0%
- £225,001 to £250,000: 1%
- £250,001 to £1,000,000: 5%
- Over £1,000,000: 6%
Stamp Duty Calculator: Calculate Land Transaction Tax
Use this calculator to help you work out how much Land Transaction Tax (LTT) you may need to pay if you buy a second home or land in Wales: Welsh Government LTT Calculator
For residential property, you’ll need to know if main rates or higher rates of LTT apply. You could need different calculations for claiming specific tax reliefs. For example, purchasing more than one property (multiple dwellings).
For more unique cases, or if you’re unsure on how the tax applies:
Who Has to Pay the Higher Rates of Stamp Duty (Land Transaction Tax)?
If you’re buying an additional residential property, you’ll probably have to pay the higher rates of Stamp Duty. These are the rules that apply:
- If the residential property you’re buying is worth £40,000 or more and you already own a property worth £40,000 or more.
- Additional properties that you part own, so long as your share is worth £40,000 or more.
- If you currently own a property abroad and are looking to buy an additional property back in the UK worth more than £40,000.
- When you’re married or in a civil partnership, the rules apply as if you’re buying the property together, even if you’re not. So, if your spouse has to pay the higher rates, you’ll have to pay them.
- If you purchase a property with someone else, if they apply individually, they will apply as a whole.

Are There Any Exemptions to Paying the Higher Rates?
There are some cases where you could be exempt from the higher rates of stamp duty as well as any stamp duty at all.
According to the Welsh Government guide, exemptions to paying higher rates of Land Transaction Tax (LTT) include:
- Property Value Below £40,000: If the property you are buying is worth less than £40,000.
- Lease Purchases: When purchasing a new or assigned lease of 7+ years, as long as the premium (upfront payment) is less than £40,000 and the annual rent is below £1,000.
- Transfer Due to Family or Relationship Changes: If you are receiving property as part of a divorce, civil partnership dissolution, or inheritance (e.g., left to you in a will).
- Mixed-Use Properties: If the property is a mixture of residential and non-residential (like a shop with a flat above it).
- Holiday Let Properties: If the property is restricted to holiday letting only, you may qualify for an exemption from the higher rate.
For more advice on exemptions, we advise speaking to a qualified financial advisor such as our partners Zeal Tax. You can call them on 01633 499771 or email them at sykes@gozeal.co.uk.
Can I Offset the Cost of Stamp Duty?
If you’re buying a holiday let in Wales, you may be eligible for certain tax reliefs that can help reduce your overall costs:
- Capital Allowances on Furnishings and Fixtures: You can claim capital allowances on the cost of furniture, fittings, and other qualifying assets within the property. This can help reduce your taxable income.
- Mortgage Interest Relief: If you’re financing your property purchase with a mortgage, you may be able to claim relief on the interest paid on the loan. This is a significant advantage for holiday let owners as it reduces your overall tax bill.
- Capital Gains Tax Relief: When you sell the property, you may be eligible for Capital Gains Tax (CGT) relief, which can reduce the tax due on any profit made from the sale of your holiday let property.
These tax advantages are available specifically for Furnished Holiday Lettings (FHL), so it’s important to ensure that your property qualifies. Speak with a qualified financial advisor to ensure you’re making the most of these opportunities.
Read about the tax advantages of holiday letting in our Furnished Holiday Lettings Tax Guide.
Recent Changes and Trends in Stamp Duty in Wales
In recent years, there has been a notable shift in government policies to address housing affordability and promote fair access to housing. For instance, while LTT rates in Wales remain unchanged, the UK government recently increased stamp duty surcharges on second homes in England and Northern Ireland.
Although this does not directly impact Wales, it highlights a broader trend of higher taxes on additional properties. Additionally, many local councils across the UK, including in Wales, have implemented higher council tax rates for second homes to discourage property vacancy. To offset these costs, some property owners have opted to move to the business rates system. In Wales, properties must meet specific letting criteria to qualify for business rates.

Considerations for Second Home Buyers in Wales
If you’re planning to purchase a second home or holiday let in Wales, here are some key considerations to keep in mind:
Understand Tax Implications
Familiarise yourself with the Land Transaction Tax (LTT) rates and surcharges to accurately budget for your purchase. The current surcharge for additional properties is 4%, which can significantly impact your overall costs.
Consult Professionals
Seek advice from property solicitors or tax advisors to navigate the complexities of LTT and explore potential tax relief options. Professional guidance can help you make informed decisions and optimise your investment.
Evaluate Letting Requirements
If you’re considering switching to business rates, ensure your property meets the necessary criteria. Assess the additional responsibilities involved in property management, such as maintenance and compliance with local regulations.
Monitor Policy Changes
Stay informed about any changes in taxation or local regulations affecting second homes in Wales. Keeping up-to-date with policy changes can help you adapt your investment strategy and avoid unexpected costs. By considering these factors, you can make more informed decisions and better manage your investment in a second home or holiday let in Wales. For more information on holiday let regulations, head to our Navigating the New Holiday Let Rules in Wales guide.
Final thoughts on Second Home Stamp Duty in Wales
Buying a second home or holiday let in Wales can be a rewarding investment, whether for personal use or as a business venture. However, understanding the costs involved, particularly second property stamp duty and holiday let stamp duty, is crucial. By staying informed about the latest rates, exemptions, and tax advantages, you can make confident and strategic decisions for your property investments.
Get in touch with our team if you have any questions!
Buying a second home in Wales is a significant financial decision that requires careful consideration of all associated costs, including the Land Transaction Tax. By understanding the LTT rates and planning accordingly, you can make an informed decision and maximise the benefits of owning a second property in this beautiful part of the UK. For more insights and expert advice on purchasing holiday lets in North Wales, explore the Menai Holidays Blog or get in touch with our team today.
Additional resources:
Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this. As a holiday letting owner you are responsible for compliance with health & safety laws, regulations and guidance, and for having suitable insurances in place (not Sykes Holiday Cottages or its brands). From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.