Today the Welsh Government announced an LTT 'holiday' to help first time buyers as well as those selling to move on. 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.
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 (£162,000) than in England (£248,000). 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 £30 million in new funding to support the construction of new, energy efficient social housing in Wales.