The Welsh government has been urged to consider phasing out Land Transaction Tax (LTT) and offer landlords low-interest loans for energy efficiency work in its upcoming budget.

Propertymark says the higher rates of LTT (up to 17%) applied to additional residential properties create a substantial upfront cost for property investors and landlords, while tenants who remain in the rental sector may face higher rents as landlords seek to recover increased costs.

In its response to the Senedd Finance Committee’s scrutiny of the 2027-28 draft budget proposals, the agents group explains: “The Welsh government should reduce the higher rates of LTT applied to additional residential properties. This would reduce the upfront cost of investment in the private rented sector and make it easier for existing landlords to invest and for new landlords to enter the market.”

It adds that landlords also need financial support with the many older properties in Wales that are more difficult and expensive to retrofit – or risk some leaving the private rented sector rather than make significant investment in properties. Propertymark suggests grants, low-interest finance and practical advice would best support landlords and homeowners.

Loans

The NRLA agrees that low-interest loans for energy efficiency work would help private rented homes reach EPC C by 1 October 2030. It says: “Landlords are also barred from applying to schemes such as Green Homes Wales, which is limited to owner-occupiers, something we are asking the government to rethink.”

The landlord body says it will continue to evidence strongly why rent controls would be a disaster for renters and the PRS after Welsh First Minister, Rhun ap Iorwerth reiterated that it was “actively exploring different measures for regulating increases in rent”.

Evidence

He told MSs the government would need to undertake “considerable policy development, evidence gathering and cross-party and cross-sector engagement” before introducing any measures. His party has also committed to ending no-fault evictions, restricting rental ‘bidding wars’, and introducing a legal right to request a pet.

A new enforcement bill is also on its way for Wales, a piece of legislation that aims to strengthen local authority enforcement of existing PRS standards, explains the NRLA. This will incentivise councils to carry out more enforcement activities by allowing them to keep more of the revenue generated through fines and civil penalties. It is expected to be introduced to the Senedd before the end of the year.

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