Stamp duty is changing in Wales
2020 hasn’t been the best year for many of us; but there is a silver lining to the covid cloud this year for the property market in Wales.
At the start of the year, the housing market took a slump as the UK government introduced a national lockdown. In the first lockdown, from March to May, all but essential moves were banned and buyers were urged to postpone their purchases. As a result, around 450,000 moves were frozen.
In a concerted effort to stimulate the property market in Wales, Finance Minister Rebecca Evans announced a temporary holiday of the tax paid on house sales for homes worth less than £250,000 until March 31, 2021.
Previously, the threshold for Land Transaction Tax was £180,000 for residential properties and £150,000 for non-residential properties. This means around 80% of house buyers will be exempt from paying tax.
This was a follow on action from England’s decision to suspend stamp duty for all properties worth less than £500,000. House values in Wales are significantly lower in Wales, with the average value standing at £197,024 as opposed to £256,000 in England.
Rebecca Evans said that in Wales the new threshold will not apply to the purchase of additional properties such as buy to lets or second homes in an attempt to help those most in need. If you are looking to buy a second home or a buy to let in Wales will still have to pay Land Transaction Tax, continuing to pay 3% on the value of the property up to £180,000 and then 6.5% on the value between £180,000 and £250,000.
The anticipation is that this reduction in tax fees will boost the property market, and also the wider economy in Wales – driving demand for bathrooms, kitchens and other soft furnishings.
Published: December 15, 2020BACK TO NEWS LIST