New measures set out by the Welsh Government regarding land transaction tax in Wales will come into effect on July 27.
The Land Transaction Tax replaced stamp duty in Wales in 2018 and is usually applied to homes valued at £180,000 or above. Under the new measures announced by the Welsh Government, the starting threshold for the tax will increase from £180,000 to £250,000, meaning around 80% of homebuyers will not pay any tax.
The tax holiday, a temporary measure which lasts until March 31 next year, primarily benefits first-time buyers and home owners buying a new property as their main residence and does not apply to landlords who buy-to-let or home owners looking to purchase a second home.
Combined with the partial reopening of the housing market in Wales, the measures are likely to encourage buyers to move forward with their purchases. Potential buyers can currently view and move into vacant residential properties, and valuations of occupied properties can be valued and inspected in line with social distancing guidelines, ahead of completing the sale.
For those in the process of buying a house, it is worth speaking with a conveyancer about exchanging contracts or completing purchases after July 27 to benefit from the tax holiday, though considerations should be made about arrangements that may be impacted upon including removals and property chains. Unfortunately, purchases completed before this date will not be eligible for the tax reduction.
The announcement from the Welsh Government follows the Chancellor’s Economic Statement on July 7 which set out changes in Stamp Duty for properties in England and Northern Ireland. Effective from July 8, residential purchasers buying property under £500,000 in these countries will not have to pay stamp duty until the end of March.
Meanwhile in Scotland, in a similar move to Wales, the starting threshold for land and buildings transaction tax has also increased to £250,000. However, the changes in Scotland are being implemented earlier, with homebuyers able to benefit from the tax reduction from July 15.
The Residential Property team at Emyr Pierce Solicitors have expert knowledge and experience of all aspects of the residential market. From queries about land transaction tax to navigating through the complexities of a property transaction, Emyr Pierce Solicitors can advise and guide you through a variety of residential property and conveyancing issues.
Contact us by telephone on 02920 616002 or email law@emyrpierce.co.uk