The Welsh government has caused outrage among landlords after it today significantly hiked their tax bill when buying both residential and commercial property.
The biggest hit is a stamp duty increase for anyone buying a property that is not their principal residence including second homes and buy-to-let properties.
Stamp duty or Transaction Tax (LTT) as it is known in Wales, is charged at a higher rate for properties that are not purchased as a main home.
Welsh Ministers have also moved to ensure there is no ‘rush’ to buy properties – the new rules kick in at close of play tomorrow (22nd December).
The current rates are 3% up to £180,000, 6.5% on the portion up to £250,000, 8% on the slab up to £400,000, 10.5% on up to £750,000, 13% up to £1.5 million and 15% on anything over that.
After tomorrow all these rates are to each rise by 1%. This means a landlord buying a £300,000 property in Wales will pay £13,400 in LTT today, but if they complete on Thursday the bill be £16,900.
But the Welsh government has also increased LTT on commercial property, not by raising the rate but increasing the range of prices it covers. For full details see the Welsh government’s website.
“This is simply unacceptable to increase the rate of additional property Land Transaction Tax in this fashion,” says John Stewart, Deputy Policy Director for the National Residential Landlords Association said.
“This increase will destabilise the private rental market in Wales, increasing costs on buying homes with immediate effect.
“The start of a national lockdown is not the time to put additional burdens on a sector already facing some of the longest and most severe Coronavirus restrictions and will deter investment in rental properties that we so badly need.”