2nd home Stamp Duty Surcharged increased 1% overnight in Wales

2nd home Stamp Duty Surcharged increased 1% overnight in Wales

18:35 PM, 21st December 2020, About 9 months ago 1

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In the draft budget, on 21 December 2020, the Welsh Government announced changes to the higher residential rates, and non-residential rates and bands, of Land Transaction Tax (LTT). The higher residential rates of LTT will increase by 1% across all bands on 22 December 2020.

If you complete on buying a property:

  • before 22 December you pay the previous rates of tax
  • on or after 22 December you pay the new rates of tax

In most cases where you have already exchanged contracts, but not completed you will be able to use the previous higher rates. Updated: higher rates quick guide.

The question is will other UK governments follow this example?

John Stewart, Deputy Policy Director for the National Residential Landlords Association said:

 “This is simply unacceptable to increase the rate of additional property Land Transaction Tax in this fashion.  This increase will destabilise the private rental market in Wales, increasing costs on buying homes with immediate effect. Anyone buying a new home, before they can sell their current principal residence, will have to find this extra money up front. This may also cause some transactions to collapse and cause further hold-ups for anyone caught in a chain.

“The start of a national lockdown is not the time to put additional burdens on a sector already facing some of the longest and most severe Coronavirus restrictions and will deter investment in rental properties that we so badly need.”

Changes for non-residential property

On 22 December 2020:

  • the zero-rate band of the tax charged for lease premiums and assignments, and freehold property transfers will increase from £150,000 to £225,000
  • the zero-rate band of the tax charged on the rent element of non-residential leases will increase from £150,000 to £225,000

The Welsh Government have also announced that they intend to increase the ‘relevant rent’ amount for the annual rent element of non-residential rents from £9,000 to £13,500 in February 2021.

End of temporary reduction period

The Welsh Government have confirmed that the temporary increase to the nil rate band of LTT for residential property transactions will end on 31 March 2021. This means on 1 April 2021, these rates will revert to the original rates and starting threshold of £180,000. You must complete your purchase before this date to use the temporary reduction rates.

Rates and bands

The updated rates and bands page and official tax calculator to include the new rates that come into effect on 22 December 2020. The date you enter into the calculator decides which rates and bands it uses.



Comments

by terry sullivan

12:55 PM, 22nd December 2020, About 9 months ago

fascism


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