People buying homes in Wales for less than £180,000 will now pay no tax under new changes announced by Finance Secretary, Professor Mark Drakeford.
In an official press release, the Welsh Government announced that the starting threshold for Land Transaction Tax (LTT) for all residential purchases in Wales will increase from £150,000 to £180,000 when the tax is devolved in April 2018.
The new threshold, which has been set £55,000 higher than the base rate for Stamp Duty Land Tax in England, aims to reduce the tax burden for around 24,000 homebuyers in Wales – including first-time buyers.
Professor Drakeford’s decision to change the starting threshold for LTT follows the UK Government’s introduction of a Stamp Duty Land Tax (SDLT) relief for first-time buyers in the Autumn Budget.
The Finance Secretary said he has given careful consideration to the right approach for both the Welsh property market and for Welsh homebuyers. His focus is to help everyone looking to buy a home in this part of the market by increasing the progressivity of the tax overall.
The new tax rates mean:
- – no one will pay more tax under the announced changes compared to the LTT rates which were announced at the time of the draft Budget in October
- – the average homebuyer in Wales will pay more than £500 less tax than under SDLT
- – around 90 per cent of homebuyers in Wales will either pay the same or less tax than under SDLT
- – around 80 per cent of first-time buyers in Wales will pay no tax – the same proportion which will benefit from the Chancellor’s first-time buyer SDLT relief in England
Professor Drakeford commented:
“Under the changes to the main rates of land transaction tax, which I am announcing today, around 65 per cent of these house sales will not be liable for tax. The changes will benefit more buyers than the Chancellor’s targeted relief for first-time buyers – more than half of buyers will benefit from a reduction in tax relative to stamp duty land tax.“This is consistent with my aim to make tax fairer and contribute to a more equal Wales. These improved rates will help meet Wales’ needs and priorities and will make a real difference to people’s lives.”