Homebuyers 'overpaid' Land Transaction Tax in Wales

Read this article on South Wales Argus.

Homebuyers could be overpaying thousands in property tax due to misclassification of uninhabitable properties.

SCA Tax has warned that buyers in Wales may be incorrectly charged residential rates of Land Transaction Tax on properties deemed unfit for habitation, such as those without working kitchens, bathrooms, or safe electrics.

An audit of more than 7,000 property transactions found that 11 per cent of buyers had overpaid, missing out on an average of £12,909 in tax relief.

Sean Swimby, director and founder of SCA Tax, said: "People assume that if they’re buying a home, they must be paying residential rates.

"But if the property was in such poor condition that it couldn’t be lived in – no working kitchen, no bathroom, or unsafe electrics – it may qualify for much lower non-residential rates.

"You might’ve bought yourself a doer-upper but been taxed as someone buying a normal home."

Misclassification can also occur with properties that include mixed-use elements, such as workshops or retail units, which may not qualify as fully residential.

Mr Swimby said: "That can mean thousands of pounds in unnecessary tax – and most people never realise they’ve overpaid."

He advised anyone who has purchased property in Wales in the past four years—particularly if the property was not immediately habitable—to check whether they may be eligible for a refund.

He said: "Getting the right advice early can make all the difference.

"Even if you’ve already completed the purchase, there’s a good chance you might have overpaid, so it’s worth checking."