Investing in a holiday let in Wales can be an attractive opportunity, whether you’re looking to generate short-term rental income or secure a long-term property investment.
However, before completing a purchase, it’s essential to understand holiday let stamp duty rules in Wales, as they differ from those in England and can significantly affect your overall costs.
Below we will explain how holiday let stamp duty works in Wales, how much you may need to pay and what to consider before buying a property.
What Is Holiday Let Stamp Duty in Wales?
In Wales, stamp duty is known as Land Transaction Tax (LTT). It applies when you purchase property or land over a certain value. If you are buying a property intended to be used as a holiday let, LTT will usually apply at higher residential rates, as holiday lets are classed as additional properties.
Therefore, holiday let stamp duty in Wales is generally more expensive than buying a main residence.
When Does Higher Rate LTT Apply?
You will usually pay the higher rates of Land Transaction Tax if:
- You already own one or more residential properties
- The holiday let is not your main residence
This includes holiday cottages & alternative short-term lets.
Even if the property is let out only part of the year, it is still considered an additional residential property for tax purposes.
Are you thinking about starting your holiday let journey? We have created a handy Guide to Buying a Holiday let, that provides more information on how to set up a successful holiday let.
Current Holiday Let Stamp Duty Rates in Wales
As of January 2026, Holiday let stamp duty in Wales is calculated using banded rates, meaning you pay different percentages on portions of the purchase price.
These rates can add a substantial upfront cost, so budgeting accurately is crucial when purchasing a holiday let.
Remember, This amount must be paid within 30 days of completion.
Higher Residential LTT Rates (Holiday Lets)
| Property Value |
LTT Rate |
| Up to £180,000 |
4% |
| £180,001 – £250,000 |
7.5% |
| £250,001 – £400,000 |
9% |
| £400,001 – £750,000 |
11.5% |
| £750,001 – £1.5m |
14% |
| Over £1.5m |
16% |
Example: Holiday Let Stamp Duty Calculation
If you purchase a holiday let in Wales for £300,000, the LTT would be calculated as follows:
4% on the first £180,000 = £7,200
7.5% on £70,000 = £5,250
9% on £50,000 = £4,500
Total holiday let stamp duty: £16,950
Can Holiday Lets Be Classed as a Commercial Property?
In some cases, a holiday let may qualify for non-residential (commercial) LTT rates, which can be lower.
This typically applies if:
- The property is part of a business operation
- It includes multiple units purchased together
- It meets specific letting and occupancy conditions
However, this area is complex and often requires professional tax advice. Misclassification can result in penalties.
Need Help?
For personalised guidance on exemptions, refunds, or complex cases, we recommend speaking to a qualified financial advisor. Our trusted partners at Zeal Tax are experts in this area and happy to help. You can reach them at:
📞 01633 499771 | 📧 sykes@gozeal.co.uk
Additional Costs to Consider
When buying a holiday let in Wales, stamp duty is just one of several costs to factor in:
- Furnishing and maintenance expenses
- Local authority licensing requirements
- Council tax or non-domestic rates
- Income tax on rental earnings
Our Guide on Running a Successful Holiday Let Business, has got everything you need to gain an understanding of the full financial picture and help assess if your investment is viable.
How to Reduce Holiday Let Stamp Duty
While holiday let stamp duty in Wales cannot usually be avoided, you may be able to reduce costs by:
- Buying multiple units in a single transaction
- Exploring commercial property classification
- Structuring purchases through a limited company (subject to advice)
Always consult a property tax specialist before making decisions based on tax savings.
We have a handy guide on Holiday Let Regulations, that will be able to guide you through other essential legal requirements.
Holiday lets can be a rewarding investment in Wales, particularly in popular tourist locations. However, holiday let stamp duty can significantly impact your upfront costs. By understanding Land Transaction Tax rates, planning ahead, and seeking expert advice, you can avoid surprises and make informed investment decisions.
If you’re considering purchasing a holiday let in Wales, taking time to understand stamp duty rules is an essential first step.
We are here to help. For more information on holiday letting, complete the form below to request contact from our team. You’ll also receive a copy of our FREE owner guide.
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.
