People buying their main homes in Wales costing less than £250,000 will not pay any tax under temporary measures announced by Wales’ Finance Minister today.
That is £250,000 lower than the stamp duty holiday on houses worth up to £500,000 announced in England and Northern Ireland by the Chancellor of the Exchequer.
This tax reduction will also not apply to purchases on additional properties including buy to let and second homes.
The Welsh Government had been under pressure to follow the UK Government but announced today that the starting threshold for land transaction tax would increase from £180,000 to £250,000 instead for the residential main rates when the new measure is introduced on Monday 27 July.
These changes reflect the nature of the housing market in Wales, where house prices on average are considerably lower in Wales [£162k] than in England [£248k]. For first time buyers the average price paid is £139,000 in Wales, and £208,000 in England.
The tax reduction that will last until 31st March 2021.
“This tax holiday will help first time buyers as well as those selling to move on, but we are taking a different direction to support jobs and house building in Wales,” Finance Minister Rebecca Evans said.
“While eliminating taxes for those that need extra help, the tax holiday rate also reduces the tax paid on more expensive properties to help the wider housing market
“Under these changes more than three quarters of homebuyers will pay no tax at all, an increase of 20% under our current measures.
“By setting these rates for Wales I am also able to confirm £30m to support the construction of new social housing and the much needed jobs they can deliver.”
The Welsh Government said that the new threshold will further reduce the tax burden in Wales. Around 80% of homebuyers liable to the main rates of land transaction tax will not pay any tax. That will be a tax reduction of £2,450 per transaction.
The Finance Minister will also confirm that the savings made by adopting these temporary rates in Wales will release £30m in new funding to support the construction of new, energy efficient social housing in Wales.