LTT on flats with long leases: multiple dwellings relief example
Buying flats with mixed lease terms
The Welsh Revenue Authority example shows why LTT multiple dwellings relief may split a purchase between short-lease flats and long-lease freehold reversions.
- Lease length can change which part counts for the relief.
- The price must be split fairly between the relevant interests.
- Check current LTT rates and rules before using the example figures.
Scroll down for the full analysis.
Read the original guidance here:
LTT on flats with long leases: multiple dwellings relief example
LTT on flats with long leases: multiple dwellings relief example
Buying several flats at once can make Land Transaction Tax, or LTT, look like a stamp duty puzzle. The key point is this: a flat sold with a long lease may be treated differently from one with a short lease, even when you buy all the freeholds in one deal.
What this rule is about
In the Welsh Revenue Authority example, a buyer purchases the freehold of five flats. Two flats have short leases. The other three have long leases with 80 years still to run.
That difference matters because the relief for buying more than one home does not treat every freehold reversion in the same way. A reversion is the ownership that returns to the freeholder when a lease ends.
Here, the long leases are the dividing line.
The buyer already owns her own home. None of the flats replaces that home. Accordingly, the example applies the higher LTT rates to part of the purchase and the main residential rates to the rest.
What the official source says
The official example says Ms G pays £345,000 in total. She pays £300,000 for the freeholds of two flats with leases originally granted for 15 years. She pays £45,000 for the freehold reversions of three flats with long leases.
- The total amount paid is £345,000.
- £300,000 is the part linked to the two short-lease flats.
- £45,000 is the remaining part linked to the three long-lease reversions.
- There are no linked transactions in the example.
- Only two flats count in the relief calculation.
- The example treats the two short-lease flats under the higher rates.
- It treats the long-lease reversion part under the main rates.
The guidance then applies multiple dwellings relief. It first divides the £300,000 home-related amount by two. That produces £150,000 for each flat.
Using the rates in the official example, LTT on £150,000 at the higher rates is £7,500. Multiplying that by two gives £15,000.
As one per cent of £300,000 is £3,000, the £15,000 calculation applies because it is higher.
Next comes the remaining £45,000. The guidance works out tax on that part by applying the fraction £45,000 divided by £345,000 to the main-rate tax on the full £345,000.
That fraction is 3/23. On the figures used in the guidance, it gives £939 of tax for the remaining part. The stated total is therefore £15,939.
What this means in practice
For LTT, you cannot safely regard a block of flats as a single straightforward purchase, because lease terms can determine which part of the price enters the relief calculation and which part does not. That distinction matters.
A long lease does not make the property disappear from the deal. Instead, the freeholder’s interest may fall into the remaining part of the calculation.
- List every flat included in the purchase.
- Check the original length of each lease.
- Check how many years remain on each lease at completion.
- Separate the price for short-lease flats from the price for long-lease reversions.
- Check whether you own another home on completion day.
- Check whether the purchase replaces the home you live in.
- Check for linked purchases before relying on a simple division.
This is the part people can miss: the total price is not always the figure used for each stage of the relief calculation. You may need to split it on a fair basis first.
How to analyse it
Begin with the property rights you are buying rather than the estate agent’s description. A sale described as five flats may include very different interests in each flat.
- Is the purchase of at least two homes, or homes plus other property?
- Does each flat have a lease, and what was its original term?
- Does a lease have more than 21 years left at completion?
- Which part of the price fairly belongs to each interest?
- Are there other purchases linked to this one?
- Do the higher LTT rates apply to the relevant part of the deal?
- What tax bands and rates applied on the effective date?
- Has the relief been included in the LTT return or an amendment?
Why ask about lease length twice? The legislation uses the long-lease rule when deciding whether a superior interest counts as an interest in a home for this relief.
Do not assume that paying one total price solves that problem. The law requires a just and reasonable split where the calculation needs one.
Example
Take the official illustration. Ms G buys five freeholds for £345,000. Two relate to flats with 15-year leases, at £300,000 in all. Three are reversionary interests above leases that began at 99 years and still have 80 years left, at £45,000 in all.
For the relief calculation, the guidance counts two flats. It divides £300,000 by two, giving £150,000. Its higher-rate calculation produces £7,500 for each, or £15,000 together.
For the £45,000 balance, the guidance applies 3/23 to £7,200, producing £939. Add £15,000 and £939: the example’s LTT bill is £15,939.
Those are the guidance’s figures, not a current quote. LTT rates and the minimum relief rule have changed over time.
Why this can be difficult in practice
Leasehold titles can be confusing. A buyer may think they are buying five homes, while the legal rights show that part of the deal is really a future interest after long leases end.
Small factual changes can alter the answer. An 80-year remaining term is not the same as a short lease. Nor is a separate but connected purchase the same as an unconnected one.
- The original lease term and the unexpired term are both relevant.
- A stated price split still needs to be fair and reasonable.
- Linked deals can change the total used in the calculation.
- Owning another home can bring higher rates into the picture.
- The source’s figures may not match the rates on your completion date.
- The official example appears to call the buyer Ms E once, although it otherwise describes Ms G.
If your solicitor has given you one figure for the whole block, ask how the price has been split between the short-lease flats and the long-lease reversions. That question can decide the LTT result.
Key takeaways
- Long-lease reversions can be treated differently from short-lease flats.
- Multiple dwellings relief can require a two-part LTT calculation.
- Use the official figures only as an illustration, not for a current return.
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 multiple-home relief is available
- LTTA 2017 Schedule 13 para 4 — splitting the price between homes and other property
- LTTA 2017 Schedule 13 para 5 — the two-part calculation after relief is claimed
- LTTA 2017 Schedule 13 para 6 — calculating tax on the homes part
- LTTA 2017 Schedule 13 para 7 — calculating tax on the other property part
- LTTA 2017 Schedule 5 para 11 — higher-rate test for purchases of several homes
- LTTA 2017 Schedule 5 para 13 — which purchased homes count for higher rates
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 source does not give its transaction date. Its quoted tax figures may reflect rates that no longer apply.
- The statutory text supplied records a change to the minimum tax rule in Schedule 13 from 13 February 2026. The source example should therefore be checked against the law in force on the purchase date.
- The source switches from Ms G to Ms E when describing the claim. This appears to be an editorial inconsistency, not a different transaction.
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.
- A copy of each lease showing its original term and remaining term.
- The price attributed to each flat and to each freehold reversion.
- Evidence of any linked purchases from the same seller or connected parties.
- Details of homes the buyer owned at the end of completion day.
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 on flats with long leases: multiple dwellings relief example [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 multiple-home relief is available https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/3 - LTTA 2017 Schedule 13 para 4 - splitting the price between homes and other property https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/4 - LTTA 2017 Schedule 13 para 5 - the two-part calculation after relief is claimed https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/5 - LTTA 2017 Schedule 13 para 6 - calculating tax on the homes part https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/6 - LTTA 2017 Schedule 13 para 7 - calculating tax on the other property part https://www.legislation.gov.uk/anaw/2017/1/schedule/13/paragraph/7 - LTTA 2017 Schedule 5 para 11 - higher-rate test for purchases of several homes https://www.legislation.gov.uk/anaw/2017/1/schedule/5/paragraph/11 - LTTA 2017 Schedule 5 para 13 - which purchased homes count for higher rates https://www.legislation.gov.uk/anaw/2017/1/schedule/5/paragraph/13 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#7280 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 source does not give its transaction date. Its quoted tax figures may reflect rates that no longer apply. - The statutory text supplied records a change to the minimum tax rule in Schedule 13 from 13 February 2026. The source example should therefore be checked against the law in force on the purchase date. - The source switches from Ms G to Ms E when describing the claim. This appears to be an editorial inconsistency, not a different transaction. 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 on flats with long leases: multiple dwellings relief example
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