New tax rules for Welsh homebuyers announced
People buying homes in Wales for less than £225,000 will pay no tax, under new measures announced by the Finance Minister.
The threshold for paying Land Transaction Tax, the Welsh version of stamp duty, is being increased from £180,000 and the change will come into force from 10 October. There will also be a small increase in the rate of Land Transaction Tax for homes that cost more than £345,000.
The Welsh Government say the move is intended to ensure that the threshold for paying tax reflects the rise in prices of homes over the last two years.
People buying homes under £225,000 will not pay any Land Transaction Tax.
Anyone buying a home costing less than £345,000 will see a reduction in the tax they pay, up to a maximum of £1,575.
People buying homes worth more than £345,000 will see an increase – up to £550 – but these only represent around 15% of property transactions in Wales.
All other elements of Land Transaction Tax will remain unchanged, meaning there are no tax reductions provided to those purchasing second homes in Wales, unlike with stamp duty land tax in England.
Rebecca Evans, Minister for Finance and Local Government, said: “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. 61% of homebuyers will not pay tax on their purchase. 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.”
The changes have been brought forward as a result of changes to stamp duty land tax (paid in England and Northern Ireland) announced by the UK Government in last week’s financial statement.
The Welsh Government say they were considering making changes at its Budget later this year, but is making changes now to give clarity to the housing market.
The Welsh Conservatives however have criticised the move, saying the tax cut doesn’t go far enough.
Welsh Conservative Shadow Minister for Finance, Peter Fox MS said: “Last week the UK Conservative Government took bold and decisive action to put aspiration, opportunity and growth at the heart of the economy. As part of that the Labour Government will receive £70 million following changes to stamp duty in England.
“While this tax cut for home buyers in Wales is welcome – something we’ve been calling for nearly a decade – it simply does not go far enough.
“House prices in Wales have now hit £240,000, yet the Labour Government in Cardiff Bay is firmly slamming the door in the faces of first-time buyers by refusing to provide specific support for them.
“It is simply astounding that Labour and Plaid Cymru can justify spending £100 million on more politicians in Cardiff Bay and not supporting people onto the housing ladder.
“Labour need to stop holding back money and provide the tax cuts that Wales needs to boost growth and support hardworking families and businesses.”
(Lead image: Geograph)
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