MSProperties news blog

First Welsh-only tax in almost 800 years.

The Welsh Government announced a new land tax system which will see relief for properties sold for less that £150,000.

 

From April 2018, Wales will be scrapping stamp duty and replacing it with Land Transaction Tax  with the new title comes new thresholds.This will be the first Welsh-only tax in almost 800 years.

The progressive move means that nine out of ten buyers will now pay the same or less in tax than they currently do, with homes priced at the lower end of the scale (up to £150,000) seeing a tax break and paying no land tax at all.

But whilst buyers purchasing homes for less than £250,000 will benefit from paying up to £500 less in tax, those buying property in excess of £400,000 will pay more than in England. Land tax for homes over £400,000 has soared to 7.5 per cent. Therefore, in some cases, a buyer in Wales could end up paying over £17,000 more in tax than a buyer of a similarly-priced property in England.

In Wales buyers purchasing a £500,000 home will pay £17,500 in land tax, compared to £15,000 for the same property in England. For a £600,000 home, the bill would be £25,000, compared with £20,000 in England. And for a £750,000 house, the tax bill would be £36,250, whereas buyers in England would pay only £27,500.

However, it is the homes selling for over £750,000 where the fee is really set to climb, to a whopping 10 percent, and properties in excess of £1.5m have attracted a new rate of 12 per cent.

Although this will be fantastic for first time buyer, should the rest have to pay the consequences?