LTT: why buying two homes could still trigger a minimum 1% charge
Minimum LTT charge in the official example
The Welsh Government example shows that relief for buying two homes could still leave LTT to pay. Its historic 1% minimum rule produced a £2,700 bill on a £270,000 purchase.
- The average price per home was £135,000.
- The normal relief calculation came to £0.
- The historic minimum charge set the bill at £2,700.
Scroll down for the full analysis.
Read the original guidance here:
LTT: why buying two homes could still trigger a minimum 1% charge
LTT: why buying two homes could still trigger a minimum 1% charge
Relief for buying more than one home at once can cut your Land Transaction Tax, or LTT. But the Welsh Government’s example shows why it did not always remove the bill. Although the normal calculation came to £0, the historic minimum 1% charge still produced tax of £2,700 because the result could not fall below the set share of the amount paid.
Not zero.
What this rule is about
This concerns the relief for buying more than one home in one deal. For a purchase of more than one home in one deal, the relief finds the average amount paid per home before working out tax from that figure, rather than taxing the full price at once.
That is the starting point.
As a result, it can lower the bill where a single total price would otherwise cross a higher tax band. There was, however, a minimum charge. It stopped the result falling below a set share of the amount paid for the homes.
Not zero.
What the official source says
An official example involves Ms C buying two homes for £270,000 in one transaction. Their separate market values are £190,000 and £80,000. She will live in the more expensive home.
It stands in its grounds. According to the source, the conditions for the subsidiary-home exception are met, so the extra rates for an additional residential property do not apply.
- The total amount paid is £270,000.
- There are two homes in the purchase.
- The average amount paid is therefore £135,000 per home.
- At the rates used in the example, that average amount is taxed at 0%.
- The normal relief calculation therefore gives £0.
- The historic minimum 1% rule then applies because that result is below 1% of £270,000.
- The tax to report in the example is £2,700.
What this means in practice
This minimum rule matters most where averaging pushes the amount for each home into a 0% band. You may expect the relief to wipe out LTT. It may not.
Here, the minimum charge gave the same £2,700 result as calculating LTT without the relief at the main rates stated for 10 October 2022. So the relief did not save Ms C tax in this example.
- Do not stop once the average calculation gives £0.
- Compare that result with the minimum amount required for the relevant date.
- Check whether all of the price relates to the homes, rather than land or other property.
- Do not assume that a historic 1% minimum applies to your own purchase.
How to analyse it
Start with the purchase as a whole, not with the label used in the estate agent’s details. Whether the relief and any subsidiary-home exception can apply depends on the facts.
- Check that at least two homes are included in the same deal, or in linked deals.
- Identify the total amount paid for the homes.
- Divide that amount by the number of homes for the averaging calculation.
- Use the LTT rates that applied when the purchase took effect.
- Multiply the average-result tax by the number of homes.
- Check the minimum charge in force on that date.
- If one home is smaller, check whether it is subsidiary to another home.
Example
Using the official figures, divide £270,000 by two. The average is £135,000. The source says the tax rate on that average was 0%, so the first calculation is £0. The historic 1% minimum is £2,700: £270,000 multiplied by 1%.
Without the relief, the source says the main rates then in force gave the same answer. Nothing was due on the first £225,000, while 6% of the remaining £45,000 was £2,700.
Why this can be difficult in practice
In practice, people often focus only on whether there are two separate homes, even though a smaller property may be treated as subsidiary where it is in the grounds of, or in the same building as, the main property and the price split meets the legal test.
That is not enough.
A just and reasonable price split is required, rather than one chosen simply to get a better tax result.
- A garden flat, annexe or cottage may need careful checking.
- Plans and the contract can help show the layout of the properties.
- Market values may help support a fair division of the total price.
- The source’s rates are expressly historic, so timing can change the answer.
Key takeaways
- A £0 result from averaging did not always mean no LTT.
- In the official historic example, the 1% minimum produced £2,700 tax.
- Check the rules and rates in force when your purchase takes effect.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- LTTA 2017 Schedule 13 para 3 — when relief for buying multiple homes can apply
- LTTA 2017 Schedule 13 para 5 — how tax is split between homes and land
- LTTA 2017 Schedule 13 para 6 — how tax on the homes element is worked out; minimum tax on the homes element
- LTTA 2017 Schedule 5 para 14 — when a smaller home counts as subsidiary
Official guidance
The pages below are the Welsh Revenue Authority’s guidance. Guidance is not law. It sets out how the Welsh Revenue Authority reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. the Welsh Revenue Authority can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- The applicable minimum percentage can change. This source does not establish the rate for a purchase completing after the date of its example.
- Whether a smaller property is subsidiary depends on the facts, including where it sits and how the price is fairly divided between the properties.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- The contract and completion date
- Details of every home included in the purchase
- A fair split of the total price between the homes
- Plans showing whether one home is in the grounds of another
- Evidence of any other homes owned at completion
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching Land Transaction Tax (LTT), the tax on property in Wales. It replaced Stamp Duty Land Tax in Wales on 1 April 2018, and SDLT does not apply in Wales. MY QUESTION LTT: why buying two homes could still trigger a minimum 1% charge [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - LTTA 2017 Schedule 13 para 3 - when relief for buying multiple homes can apply https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/3 - LTTA 2017 Schedule 13 para 5 - how tax is split between homes and land https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/5 - LTTA 2017 Schedule 13 para 6 - how tax on the homes element is worked out https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/6 - LTTA 2017 Schedule 13 para 6 - minimum tax on the homes element https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/6 - LTTA 2017 Schedule 5 para 14 - when a smaller home counts as subsidiary https://www.legislation.gov.uk/anaw/2017/1/schedule/5/paragraph/14 Guidance page from the Welsh Revenue Authority on this topic (guidance, not law): https://www.gov.wales/land-transaction-tax-relief-acquisitions-involving-multiple-dwellings-technical-guidance#7274 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from the Welsh Revenue Authority is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - The applicable minimum percentage can change. This source does not establish the rate for a purchase completing after the date of its example. - Whether a smaller property is subsidiary depends on the facts, including where it sits and how the price is fairly divided between the properties. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 3 September 2026
Useful article? You may find it helpful to read the original guidance here: LTT: why buying two homes could still trigger a minimum 1% charge
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