LTT Holiday For Welsh Housing Market
According to suggestions made by the Welsh First Minister Mark Drakeford, there will further changes coming to the Welsh housing market in coming weeks.
It is thought that from 27 July, viewings of occupied properties will resume – on the proviso that the coronavirus pandemic statistics still continue their decline.
A little bit of extra good news, in the hope to stimulate the market. It has been announced the homebuyers in Wales will also have a land transaction tax (LTT(the Welsh equivalent of stamp duty land tax)) holiday.
This tax reduction will not apply to purchases on additional properties including buy to let and second homes.
Rebecca Evans, Finance Minister said:
“This tax holiday will help first time buyers as well as those selling to move on, but we are taking a different direction to support jobs and house building in Wales.
“While eliminating taxes for those that need extra help, the tax holiday rate also reduces the tax paid on more expensive properties to help the wider housing market
“Under these changes more than three quarters of homebuyers will pay no tax at all, an increase of 20% under our current measures.
“By setting these rates for Wales I am also able to confirm £30m to support the construction of new social housing and the much needed jobs they can deliver.”
The starting threshold for land transaction tax will increase from £180,000 to £250,000 for the residential main rates when this new measure is introduced on Monday 27 July. This is a tax reduction that will last until 31 March 2021.
Mark Evans, Chair of the Wales Committee of the Law Society of England and Wales, said:
“We welcome the support and stimulus for the residential conveyancing market in Wales.
“Transaction volumes were significantly down during lockdown and June saw negative annual house price growth for the first time since 2012.
“This is a time of upheaval in the lives of many who need to move home for various economic, social and personal reasons. A temporary reduction in residential property transaction costs to support such people and to bring forward demand makes sense. It will also be welcome news for solicitors whose volume of work has fallen.
“It is particularly welcome that this land transaction tax holiday is to take effect from 27 July, as this is the date the First Minister had previously advised people to prepare for reopening the housing market fully, and will be in force until the end of March 2021. It will bring the rate payable for purchases of main residences valued at between £180,000 and £250,000 to zero. Such properties selling for less than £180,000 are already exempt from paying the tax.
“The home moving market will be stimulated but Welsh Government must remain vigilant to ensure the right balance of stability, fairness and confidence in the market is in place once this temporary measure ends.”