Land transaction tax changes announced

The following changes will apply for residential transactions with an effective date on or after 10 October 2022:

• Nil-rate threshold increases to £225,000 (up from £180,000).
• The portion over £225,000 up to £400,000 is taxed at 6% (this band straddles the previous 3.5% and 5% bands).

The other bands from £400,000 upwards are unchanged.

The revised bands and rates from 10 October 2022 are as follows:

Transitional rules will be introduced to ensure taxpayers who exchange contracts before the regulations making the changes come into force are protected from any tax increase.