How Does the SDLT Change Impact Properties in Wales?
On 8 July, the UK Government announced a temporary cut on Stamp Duty costs until March 31 2021. In England, this includes a reduced tax on the first £500,000 of a property, but what does this mean for properties in Wales?
The Welsh Government made their own announcement on 14 July that they’re also introducing a temporary tax reduction on house sales but the threshold will be £250,000. This means around 80% of house buyers will be exempt from paying tax.
If you’re looking to complete your property transaction and you’re unsure how the Stamp Duty changes affect you, get in touch with our Conveyancing Solicitors for free initial advice.
How is Stamp Duty Different in Wales?
Stamp Duty varies slightly across the UK. The major difference in Wales is that Stamp Duty was replaced by Land Transaction Tax (LTT) in April 2018.
Previously, the threshold for Land Transaction Tax was £180,000 for residential properties and £150,000 for non-residential properties. But from 27 July 2020, Land Transaction Tax payments are being temporarily lifted on properties up to £250,000.
These changes will be in place until 31 March 2021.
What About Second Homes in Wales?
If you are looking to buy a second home or a buy to let in Wales will still have to pay Land Transaction Tax.
They will continue to pay 3% on the value of the property up to £180,000 and then 6.5% on the value between £180,000 and £250,000.
You can see a table of the Welsh Land Transaction Tax rates on Gov.wales.
Is Now the Best Time to Buy?
For many house buyers, the reduction in Land Transaction Tax is a welcome surprise.
So how much will you save after the reduction?
Let’s look at an example using the average house price in Wales, which is £193,000.
If you’re buying a property for £193,000, you’d pay no Land Transaction Tax because your property is under the £250,000 threshold.
Once the Land Transaction Tax reductions end on 31 March 2021, you’ll pay no Land Transaction Tax on the first £180,000 of your property and then 3.5% on the other £13,000.
If you’re buying a property that costs more than £250,000, you’ll still see a significant saving. For a property worth £300,000, you’ll pay 5% Land Transaction Tax on the amount over £250,000. In this case, it’s £50,000 so you’ll pay £2,500 in LTT.
You’ll save £2,450. You would previously have paid 3.5% tax on £70,000 too, which is the amount between £180,000 and £250,000, but because of the Land Transaction Tax cuts, you’ll save nearly £2,500 by completing before 31 March.
Let Us Help You to Buy
If you’ve decided now is the best time for you to buy or sell a home, we’re here to help you. We’re offering some exclusive offers, open to both new and existing clients who are buying or selling:
- £100 cashback when you complete within 3 months – We want to help you get through the conveyancing process as quickly and as smoothly as possible, so you can get settled into your new home. The cashback offer applies to both buying and selling and we’ll be keeping it open to all clients, even after the temporary Stamp Duty and Land Transaction Tax reductions are lifted
- A free Will – Along with the £100 cashback, if you complete within 3 months, you can make a free standard Will online. While this may not feel like a priority when buying or selling, it’s so important to have a Will in place to make sure your share of the property goes to whoever you choose when you die
You can take advantage of these offers and the Land Transaction Tax reduction by getting in touch with one of our Conveyancing Solicitors today.
If you’ve got a strict timescale in place, we can work with you to help you get through the process as quickly as possible.
If you already completed before the reduced Stamp Duty and Land Transaction Tax was announced, you might be interested in reading more about our open letter to backdate it.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London and Manchester.