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The threshold for Welsh Land Transaction Tax has been raised from £180,000 to £250,000.
Land transaction tax replaced stamp duty land tax in Wales from April 2018 and is collected by the Welsh Revenue Authority.
Announcement of the change by Minister for Finance and Trefnydd, Rebecca Evans, follows an increase in the threshold for SDLT announced recently for England.
The Welsh changes will apply to purchases of residential property from 27 July 2020 to 31 March 2021 only. After that date the old rates will apply once more.
In the interim it is estimated that 80 per cent of Welsh homebuyers will pay no LTT.
‘The changes introduced by the UK government reflect the nature of the housing market in England, in particular, the challenges facing buyers in London and the South East of England where house prices are considerably higher than they are in Wales’, said Evans.
‘Our current land transaction tax (LTT) threshold of £180,000 means that not only are we the only country in the UK with a starting threshold that is higher than the average price of a home, but also that currently around 60 per cent of homebuyers do not pay tax.
‘However, despite having the most progressive starting tax threshold in the UK, I am today announcing changes to the LTT rates and thresholds. These rates and thresholds have been set so they more closely reflect the property market in Wales and will ensure that we retain a progressive regime that expects those with the broadest shoulders to contribute a larger share in tax’.
The temporary revised rates of LLT are:
|Price threshold||LTT rate (%)|
|Portion up to and including £180,000||0|
|Portion over £180,000, up to and including £250,000||3.5|
|Portion over £250,000, up to and including £400,00||5|
|Portion over £400,000, up to and including £750,000||7.5|
|Potion over £750,000, up to and including £1,500,000||10|
|Portion over £1,500,000||12|
The addition rate for second homes costing over £40,000 remains in place.