Prospective homeowners and property professionals in Wales finally have clarity as Land Transaction Tax (LTT) changes have been confirmed by the Welsh Government.
After the recent announcement that the Stamp Duty threshold in England and Northern Ireland was increasing to £500,000, the Welsh Government have been under immense pressure to follow suit in some form or another.
Let’s not forget, only a few years ago, the devolved Welsh nation decided to implement their own tax law – the first in over 100 years – and change from Stamp Duty Land Tax (SDLT) to the Welsh Land Transaction Tax.
What are the differences between SDLT and the Welsh LLT?
Whilst on the face of it, the Stamp Duty Land Tax (SDLT) and Land Transaction Tax are similar in principle, there were some fundamental differences.
In both cases, a 3% surcharge for second homes or investment properties still applies.
Welsh investor landlords will be disappointed
The change confirmed by the Welsh Government is that the threshold for LTT will rise on 27th July 2020 from £180,000 to £250,000, until 31st March 2021. This will certainly boost the housing market in this band as purchasers look to secure a deal before next March and sellers hope to take advantage of the flurry of buyers.
This tax holiday won’t apply to landlords or second homeowners though, as the same higher rate of tax (3% from £40,000) will still apply.
Also, as most buy-to-let property investments are likely to be below a purchase price of £180,000, when taking into consideration the threshold is currently £180,000, most property investments for Buy to Let, especially in Swansea, are most likely to be under this purchase price anyway, so basically, there is no change.
In England and Northern Ireland, the Government are being criticised for second homeowners and investors being able to take advantage of their respective tax holidays, and concerns are growing that this new measure will inflate house prices even further. This is potentially now up for review too.
Calculate your LLT here
The big positive, though, is that landlords and investors can now start to make serious plans again as the position on LTT is made clear; you can factor in the (lack of relevant) changes accordingly!
If you’re thinking of investing in buy-to-let in Swansea and would like a 15-minute consultation on where the best places are to invest in, book your free call here with one of my letting experts.