News The New Land Transaction Tax - A Guide for Homebuyers in Wales
Published by AgentPro on 30th November, 2017
The Chancellor's announcement last week to axe stamp duty for first-time buyers buying a home of up to £300,000, following shortly after the Welsh Assembly Government's announcement of a new Land Transaction Tax to replace stamp duty has left Welsh homebuyers a tad confused about where they stand.
We answered some of the most common questions we have been asked for property magazine, Estate Agent News:
What is the Land Transaction Tax in Wales?
From April 2018, collection of land registration taxes will no longer be down to National Government, but will be devolved to the Welsh Government. They have prepared the Land Transaction Tax to replace Stamp Duty for property buyers in Wales from next April onwards. Many buyers will benefit from the new charges.
What will the Fees be from April 2018 Onwards?
Land Transaction Tax Rates From 1st April 2018
Is this more than existing Stamp Duty Rates?
Taking the Chancellor's support for first-time buyers out of the issue, these rates are mainly lower than charges in England.
The bad news comes for those buying property worth more than £400,000 in Wales. These purchasers will have to pay a higher rate of tax in Wales compared to England. On a house worth £500,000 you would pay £17,500 in Wales but only £15,000 in England. The biggest increase is for those buying houses in Wales worth more than £750,000 as the tax rises to 10%. For someone buying a house for £925,000 house in Wales would pay £53,750 with a purchaser in England paying £36,250
Anyone buying a second home will still have to pay an additional 3% on the value of the property as they already do under the current Stamp Duty Land Tax Regime.
Do first time buyers have to pay Stamp Duty in Wales?
Up until the end of March, they will benefit from the relief outlined in the Budget. Past March 2018, they will pay the Land Transaction Tax instead, which means they will only be exempt up to £150,000 instead of £300,000. It is possible that the Welsh Government may decide to follow England on this, but as it stands, that is the position and we expect to see a lot of first time buyers pressing to complete in early 2018 to benefit from the budget cut.
As always, if you have any questions about stamp duty or the new Land Transaction Tax and how it applies to your personal situation, feel free to give us a call and we will do our best to help.