Estate agents in Wales are gearing up for the introduction of the new Land Transaction Tax Bands which comes into force next week.
The new tax will replace Stamp Duty in Wales.
The average house price in Wales is £180,000.00 and house purchasers under this threshold (even if they are not first time buyers) will not pay any duty at all. However, for additional property, such as buy to let or second homes, there will be a 3% surcharge applied to all bands.
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%|
Welsh property professionals have mostly welcomed the move. A spokesman for the Welsh Government said the new rules would
- simplify the tax and make it fairer
- improve its efficiency and effectiveness, and
- focus on Welsh needs and priorities.
Mark Hayward, Chief Executive, NAEA Propertymark said:
“We’re pleased that the Welsh Government has listened to our proposals and next week will be introducing new land transaction tax (LTT) bands in Wales; house buyers will really feel the difference of these changes. For buyers at the lower end of the market, the new bandings mean they won’t pay any land transaction on properties worth up to £180,000; this is the value of the average house price in Wales.”
Gareth John, Managing Director of Estate Agent Software provider AgentPro said:
“It’s a welcome move for many buyers in Wales, and will keep the mid-market Welsh property market thriving. 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 more concerned, however:
“The higher rates of tax for properties above £400,000 (which applies to many of the properties in Gower, which we represent) will act as a disincentive to sales. Our clients are concerned that their properties could fall in value as a result. We’ll have to take a sharp intake of breath and see what happens, but the new LTT is definitely not welcome at the higher end of the market.”