Welsh Land Transaction Tax shock increase
Starting today (22 December), a 1% increase in Land Transaction Tax (LTT) – the Welsh equivalent of Stamp Duty Land Tax – on second homes has begun. Meaning second-home owners pay a 4% levy when they buy homes up to £180,000.
For homes bought over £1.6m, LTT increases to 16%.
The change has been made in an attempt to raise £13m for new social housing in Wales.
In a statement made by the Welsh government last night, they revealed that:
“If you complete on buying a property before 22 December you pay the previous rate of tax – on or after the 22 December you pay the new rate of tax. In most cases where you have already exchanged contracts, but not completed you will be able to use the previous higher rates.”
John Stewart, deputy policy director of the National Residential Landlords Association, commented:
“This is simply unacceptable to increase the rate of additional property Land Transaction Tax in this fashion. This increase will destabilise the private rental market in Wales, increasing costs on buying homes with immediate effect. Anyone buying a new home, before they can sell their current principle residence, will have to find this extra money up front. This may also cause some transactions to collapse and cause further hold-ups for anyone caught in a chain.
“The start of a national lockdown is not the time to put additional burdens on a sector already facing some of the longest and most severe Coronavirus restrictions and will deter investment in rental properties that we so badly need.”