No tax for people buying homes in Wales under £225,000
People buying homes in Wales for less than £225,000 will pay no tax, under new measures announced today, September 27.
“This is a change tailored to the unique needs of the housing market in Wales and contributes to our wider vision of a fairer tax system,” said Minister for Finance and Local Government Rebecca Evans.
“61% of homebuyers will not pay tax on their purchase. These changes will get support to people who need it and help with the impact of rising interest rates.
“We also know that helping people at the lower end of the market will have a particular benefit for first time buyers. We help people buy their first home in a number of different ways, including shared ownership and help to buy schemes, and I am pleased to be able to extend that support through these changes to Land Transaction Tax.”
The threshold for paying Land Transaction Tax is being increased from £180,000 and the change will come into force from October 10.
There will also be a small increase in the rate of Land Transaction Tax for homes that cost more than £345,000.
The move is intended to ensure that the threshold for paying tax reflects the rise in prices of homes over the last two years.
People buying homes under £225,000 will not pay any Land Transaction Tax.
Anyone buying a home costing less than £345,000 will see a reduction in the tax they pay, up to a maximum of £1,575.
People buying homes worth more than £345,000 will see an increase – up to £550 – but these only represent around 15% of property transactions in Wales.
All other elements of Land Transaction Tax will remain unchanged, meaning there are no tax reductions provided to those purchasing second homes in Wales, unlike with stamp duty land tax in England.
The changes have been brought forward as a result of changes to stamp duty land tax (paid in England and Northern Ireland) announced by the UK Government in last week’s financial statement. The Welsh Government was considering making changes at its Budget later this year, but is making changes now to give clarity to the housing market.
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Good of them to modify that Tax just when buying a home is placed further beyond the reach and means of even more people. Interest rates are heading north, banksters will stash their bonuses in overseas shelters…. and the only trickle down will be the feeling that someone is peeing down on us !
So a significant proportion of home buyers could save up to £1570 while a much lower number paying more for their houses fork out no more than £500. Won’t that leave a hole somewhere in the Welsh gov’s finances? So which service will inevitably lose out?