Welsh government announces cut to Land Transaction Tax

In the last few weeks property tax holidays have been announced for England, Scotland and Northern Ireland, and Finance Minister Rebecca Evans has announced that Wales will follow suit. 

Whilst the current lower threshold for Land Transaction Tax (LTT) is £180,000, it will be temporarily increased to £250,000 to facilitate an increased number of property transactions to take place tax-free. The change comes into effect on 27th July, the same day the Welsh housing market will fully reopen, and will last until the end of March 2021.

The new tax bands are as follows:

The above rates are only applicable to main residential homes. If you’re buying a residential property and you already own one or more, you may need to pay higher rates. 

What will the impact be? 

Our research shows that the move will allow 82% of home buyers in Wales to purchase their property without paying any tax at all. Before the change in thresholds, this figure was 60%. 

Rob Houghton, CEO of reallymoving, said: “This tax giveaway could have a significant impact, particularly in more expensive locations such as Cardiff, incentivising buyers and encouraging sellers who have been sitting on the fence to commit to a move, boosting the supply of homes for sale.” 

The move might also be an excellent opportunity for First Time Buyers in Wales, who previously have not benefitted from any tax exemption. 

You can read more about the changes on the Welsh government’s website.