Land Transaction in Wales sees a sudden hike.
The Land Transaction Tax in Wales (formerly known as Stamp Duty Land Tax), has been increased by 1% when you purchase a second home. The Welsh Government has put the sudden increase into motion as it looks to raise £13M for new social housing. This means that home-owners purchasing a second home now face paying a 4% levy when buying homes up to £180,000 which rises to 16% for homes worth £1.6M or over.
This came into effect on the 22nd December 2020 with very little notice for the change, therefore if you are due to complete buying a property on or after this date you will need to pay the new rate of tax. If you have already exchanged contracts but not completed you will be able to use the previous rates.
Douglas Haig, Director for Wales at the NRLA and Managing Director for James Douglas comments on behalf of investors,
“It’s outrageous that the Welsh Government has taken a decision with no consultation or impact assessment and implemented a tax rise with only a few hours’ notice. This will impact not only people providing additional housing but will also impact those vital individuals in housing chains that are able to complete on one purchase before their previous house is sold which means that many housing chains are likely to fall through just before Christmas.
It’s another sign that the Welsh Government has no interest in supporting people in the private rented sector and simply wish to continue to increase costs.”
If you are purchasing a an additional property after the 22nd December the charges will be as follows:
James Douglas looks to support investors and landlords in the private rented sector during these changes, if you would like to talk to one of our agents about your portfolio and how we can help please contact us.