NAEA brands Welsh Government’s decision to keep extra stamp duty ‘punitive’

NAEA brands Welsh Government’s decision to keep extra stamp duty ‘punitive’

The National Association of Estate Agents (NAEA) have blasted the Welsh Government’s retention of the 3% additional home Stamp Duty as a ‘punitive regime’.

Further to a technical consultation carried out over the summer; finance secretary, Mark Drakeford said that there had been “….a clear view from respondents about the importance of maintaining a single, consistent rate across the UK.”

The Office for Budget Responsibility has estimated that the tax charge will generate £9 million in 2016-17 in Wales, rising to £14 million in 2020-1. The proceeds generated from this tax will be used to fund public services in Wales.

Defending the continuation of the 3% tax rate on additional residential properties, Mr. Drakeford said: “The vital revenue generated will continue to help fund our valued public services.

“It is important we use the opportunity of tax devolution to consider whether changes can be made to improve efficiency, effectiveness and create a focus on Welsh needs and priorities.
We will continue to explore the suggestions put forward by stakeholders about how this higher rate can be adapted through secondary legislation to meet Wales’ circumstances.”

Mark Hayward, Managing Director of NAEA, and David Cox, Managing Director of the Association of Residential Letting Agents (ARLA), disagreed with the idea that the changes would be favourable in the interests of buy-to-let landlords or renters: “We are disappointed that the Welsh Government has decided to take this decision and followed the rest of the UK in implementing this punitive regime for Buy to Let landlords.

“We have been highly supportive of the new devolved tax regime in Wales precisely because it was a way that it could set its own tax agenda that works best for the housing sector in the region. In continuing with the surcharge, the Welsh Government is not making the most of its new powers in order to increase the supply of homes that Wales so desperately needs.

“The measures will lead to increased rent prices through a fall in supply and increasing demand. Tenants will also see additional costs passed onto them, as landlords look for ways to increase the profitability of their properties in the face of spiralling expenses. Ultimately, this will lead to sub-standard accommodation as money, previously used for the up keep of homes, will be swallowed up in tax payments.”

Rachel Booth

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