Our March 2025 summary of the latest developments in Property law and practice is as follows:

There have been recent changes to Wales’ Land Transaction Tax (LTT) rules affecting both additional homes and multiple dwelling relief, which are now in full force.

Additional homes surcharge – the Land Transaction Tax (Amendment) Regulations 2024 have raised LTT rates in Wales for higher rates residential property transactions — primarily for additional homes or purchases by corporate bodies where the price is £40,000 or more. From 11 December 2024, the new tax rates apply in tiers based on property value, starting at 5% for properties up to £180,000 and rising to 17% for amounts above £1.5 million. These increases won’t apply to transactions under contracts made and substantially performed before 11 December 2024, unless the contract is altered or reassigned on or after that date.

Multiple dwellings – new rules changing the LTT in Wales will take effect on 7 February 2025, focusing on Multiple Dwelling Relief (MDR), which helps reduce tax when buying multiple homes. The upcoming changes mean MDR will no longer be available when a smaller, “subsidiary” dwelling (like an annex) is bought with a main home and the purchase is taxed at standard residential rates. In these cases, the smaller property won’t count as a separate home for MDR purposes.

However, MDR will still apply when the purchase is taxed at higher surcharge rates — typically when the buyer already owns another home. For example, if someone buys multiple properties and one includes a subsidiary dwelling, MDR remains available at the higher tax rate. This is intended to support investment in private rentals, student housing, and build-to-rent properties. These changes will not apply to contracts signed and mostly completed before 7 February 2025, unless the contract is changed, reassigned, or certain rights are exercised on or after that date.

There are also upcoming changes for SDLT:

• From 1 April 2025, the nil-rate threshold for residential property transactions reverts to £125,000 (down from £250,000), with a 2% SDLT rate applying to the portion between £125,000 and £250,000.
• For first-time buyers, the nil-rate threshold returns to £300,000 (down from £425,000), and the upper limit for first-time buyer’s relief reverts to £500,000 (down from £625,000).

The Government is consulting on reforms to the energy performance regulations for buildings in England and Wales, focusing on Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs), rather than minimum energy efficiency standards for rented properties. Proposed changes include introducing multiple performance metrics on EPCs, reducing their validity period, and adding new requirements for rental properties, heritage buildings, and houses in multiple occupation (HMOs).

Compliance and enforcement measures include improving the training and accreditation of EPC assessors, increasing monitoring to prevent manipulation of assessments, and raising penalties for breaches in line with inflation. The consultation recently closed on 26 February 2025.