Higher LTT rates usually apply where the taxpayer buys a residential property in Wales worth £40,000 or more and they already own one or more residential property. If a previous main home is sold within three years of buying a new main home, a refund of the higher LTT rate may be possible.
However, unresolved fire safety defects and emergency restrictions can at times impede or prevent the sale of a former main residence within the three-year window.
The Welsh government is consulting on new rules that will allow an unlimited extension to the three-year window in specified circumstances.
The refund and exception rules can apply in a purchase before sale (PBS) scenario and a sale before purchase (SBP) scenario. The extension is intended to apply to both PBS and SBP scenarios where emergency restrictions prevent a transaction. Where a transaction is impeded by fire safety defects, the three-year window will only be lifted for PBS transactions taking place from 1 April 2018.
The consultation on amending the LTT higher residential rate refund and exception rules is open until 17 March.
If you have comments on the proposals that could contribute to a response from ICAEW, please contact Lindsey Wicks.
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