It claims new tax rules will benefit homebuyers at the lower end of the market
A few days after the UK government declared cuts in stamp duty land tax (SDLT) imposed on property or land purchases over a certain price in England and Northern Ireland, the Welsh government has also announced changes on its land tax.
Under new measures announced by Welsh finance minister Rebecca Evans, people buying homes in Wales for less than £225,000 will no longer pay a tax on the property purchase.
The threshold for paying Land Transaction Tax (LTT) – Wales’ version of the SDLT – is being increased from £180,000, with the change coming into force from October 10.
Those buying a home costing less than £345,000 will see a reduction in the tax they pay, up to a maximum of £1,575, while those buying a home worth more than £345,000 will see an increase – up to £550.
Read more: UK government cuts stamp duty tax.
The move, Evans said, is intended to ensure that the threshold for paying tax reflects the rise in prices of homes over the last two years.
“This is a change tailored to the unique needs of the housing market in Wales and contributes to our wider vision of a fairer tax system,” she stated, also pointing out that 61% of homebuyers will no longer pay tax on their purchase due to the new measures. “These changes will get support to people who need it and help with the impact of rising interest rates.
“We also know that helping people at the lower end of the market will have a particular benefit for first time buyers. We help people buy their first home in a number of different ways, including shared ownership and help to buy schemes, and I am pleased to be able to extend that support through these changes to Land Transaction Tax.”
All other elements of the LTT will remain unchanged, meaning there are no tax reductions provided to those purchasing second homes in Wales, unlike with SDLT in England.
The Welsh government said it was considering making changes at its budget later this year, but is making changes now to give clarity to the housing market.