The Welsh Government has announced changes in the rate of stamp duty – marking the first time in 800 years that the country has had its own set of taxes.
The Welsh Finance Secretary, Professor Mark Drakeford, unveiled the new plans as part of the Welsh budget for the next two years that has been created to help people get on the property ladder.
According to the Welsh Government, when the new land transaction tax (LTT) comes in, nine out of ten buyers will pay the same or less in tax than they do at the moment – but there will still be some losers due to the shake up.
In the UK, currently buyers purchasing property for £125,000 or under are exempt from paying stamp duty. As of April, this figure will be raised to £150,000 in Wales.
However, buyers looking to purchase a home for between £400,000 and £750,000 will see their rate of tax rise from 5% to 7.5%.
All buyers purchasing a second home or investment property will still be liable for the 3% additional tax.
“This is a new budget for Wales and marks another important milestone in our devolution journey as we prepare to take on new tax and borrowing powers from April,” commented Professor Drakeford. “Rather than just setting out our revenue and capital spending priorities, this draft budget is the first to outline the decisions we have taken to raise a proportion of our own revenue to support public services. Using these new powers, we have been able to introduce progressive and innovative tax plans, which will make a real difference to people’s lives, change behaviours and deliver improvements to all our communities.”
The new rates are also good news for people purchasing commercial property in Wales. All businesses buying premises up to the value of £1.1m in Wales from April will either pay no tax or up to £1,000 less tax than under stamp duty land tax.