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Throughout our work on the data platform we have considered the impact that policy will have on delivering regional LTT. We have explored these questions through discussions within the team and within the wider WRA, and through data and user research. This has allowed us to come up with a number of policy questions that are unanswered at this stage. We will be able to share these with our colleagues at Welsh Treasury, who will be working with Local Authorities to answer these questions. We will also be sharing with Welsh Treasury what we have learnt along the way and any possible answers that we have come up with.

We have separated our unanswered questions into 4 broad areas: second home definition, second home areas, property location, and border properties. This is not an exhaustive list, but captures the essence of the concerns and considerations we have identified and hope we can help Welsh Treasury and Local Authorities answer.

Challenges we are working on

No universal second home definition

In order to implement regional LTT on second homes, there needs to be a clear definition of a second home. There are various existing definitions that are used for other taxes, such as from Section 12B of the Local Government Finance Act 1992, but we have identified that it is not appropriate for regional LTT, largely because it includes a dwelling needing to be “substantially furnished”. We know that Land Transaction Tax is a transactional tax, with the tax based on the purchase price of a property, and that regional LTT will add intended use to the nature of the tax. This means that the eventual definition will need to consider intended use which is not typically considered when describing a second home. Furnishment, however, is not considered for LTT currently, and will not be relevant when regional LTT is implemented. Therefore, including whether a property is furnished or not is not helpful when coming up with a definition of a second home, but determining intended use will need to be added.

Our Welsh Government colleagues are working on a single definition that can work across departments and organisations. We have shared our research and comments with Welsh Treasury, and the WRA will continue to assist them in finalising the definition. This will make current and future rules easier for the public to understand, and make it easier to apply a consistent policy across government and local authority areas.

Defining second home areas


This is an area that we have discussed frequently as a team, and we have already shared some of our thoughts with Welsh Treasury on the topic. If you want to administer a local tax, you first need to identify the area you want the tax to apply to, and identify the boundaries of the area. We have discussed how to go about this extensively, talking through the pros and cons of defining an area through different methods, from existing boundaries or geographical to a data-driven approach. The following are some of the approaches we have considered and will discuss further with Welsh Treasury before they work with Local Authorities to determine the best approach.

  • Full postcodes
  • Geographical boundaries e.g. within x miles of the coast
  • Wards
  • Senedd constituencies boundaries
  • Statistics based geography
  • Boundaries based on local knowledge or bespoke boundaries determined by local authorities

Size of the area

There is also the question of how big these areas will be, and if there will be a limit on how many areas can be ‘turned on’ within a local authority. There could be some authorities that want regional LTT to apply to the whole Local Authority area, or to a large part of the area. Equally, there may be some authorities that wish the tax to apply to one or many very small areas. We need to work out how to administer the tax in a way that is consistent regardless of the size or number of the areas.

Identifying property location

Once an area is defined, the next step is identifying whether a property actually falls into the area or not. We hoped to answer how the location of a property is defined. It seems straightforward, but it is a really important question when it comes to a tax based on very specific areas. There are a few options, but they depend upon data availability and what Local Authorities can agree is the best choice.

The below are some ways that a property is able to be defined.

  • single point on a property such as post box
  • Whole property boundary
  • Residential property boundary
  • UPRN (centre of property)

Border properties & apportionment

his leads us onto another consideration: that of apportionment. With LTT currently, there are some properties that fall on the Wales/England border. When this happens, the part of the property that falls in Wales is taxed to LTT on a ‘just and reasonable basis’, and the part that falls in England is taxed to SDLT similarly. With regional LTT, there may be cross country borders that will need to be apportioned, as well as cross local authority borders and borders between areas that have regional LTT turned on and those that do not. It is possible the same ‘just and reasonable’ basis could apply to the various borders that will be encountered in regional LTT, but the hyperlocal focus may necessitate alternative solutions.

As with the other questions raised in this blog, we do not have the answer to this yet, but the WRA will continue to assist Welsh Treasury and Local Authorities to come to a resolution. We are grateful to have the information gleaned from our work in the data platform team to allow us to share our experience, questions and knowledge with Welsh Government colleagues.