PEOPLE buying their main homes in Wales costing less than £250,000 will not pay any tax under temporary measures announced by the Finance Minister on Tuesday (Jul 14).
The starting threshold for land transaction tax will increase from £180,000 to £250,000 for the residential main rates when this new measure is introduced on Monday 27 July. This is a tax reduction that will last until 31st March 2021.
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. This will be a tax reduction of £2,450 per transaction.
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.
This tax reduction will not apply to purchases on additional properties including buy to let and second homes.
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.
Finance Minister Rebecca Evans said:
“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.
“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.”