Property professionals this side of the Severn Bridge are gearing up for the new Land Transaction Tax, which will come into force for property sales transactions next week and will replace Stamp Duty in Wales.
Wales’ current average property price is £180,000.00. From next week onwards, purchasers under this threshold (even if they are not first time buyers) will no longer be liable for land taxes unless they are purchasing an additional property, such as a holiday home or buy-to-let.
Purchasers of buy to let or second homes will incur a 3% surcharge.
Here’s the new rates that will therefore apply from Monday 2nd April:
|Band||Normal Rate||Additional Property|
|less than £180k||0%||3%|
|£180k to £250k||3.5%||6.5%|
|£250k to £400k||5%||8%|
|£400k to £750k||7.5%||10.5%|
|£750k to £1.5m||10%||13%|
|rest over £1.5m||12%||15%|
The Welsh Government have previously said that the new land transaction tax will:
- simplify property taxes in the principality and make them fairer
- improve efficiency and effectiveness, and
- focus on Wales’ needs and priorities.
Gareth John, Managing Director of Estate Agent Software provider AgentPro said:
“The new land transaction tax will reduce the costs of moving for many purchasers in the principality. However, it could pose a challenge for estate agents managing sales in border locations, where estate agents will have to manage two types of tax calculations within one branch. We’ve brought changes into AgentPro to help make this more manageable for our customers.”
Swansea estate agents Rees Richards, who manage property sales within the Gower were concerned, however:
“The higher rates of tax for properties above £400,000 (which applies to many of the properties in Gower, an area we represent) will act as a disincentive to sales, and that is something we are concerned about. Hopefully it won’t lead to property values falling, but we will have to wait and see.”