Currently, stamp duty is charged on all purchases above £125,000, in line with the tax set up in England. However, from the start of 2018-19, stamp duty in Wales will be replaced by the Welsh land transaction tax, and with it the 0% tax threshold will be increased to £150,000.
The table below details the various tax bands under the Welsh land transaction tax:
|Residential LTT rates|
|Price threshold||Main residential rates|
|£0 – £150,000||0%|
|£150,000 – £250,000||2.5%|
|£250,000 – £400,000||5%|
|£400,000 – £750,000||7.50%|
|£750,000 – £1.5m||10%|
The Welsh government maintains that all purchases of less than £400,000 will see buyers pay less or the same tax as the current system, with an average saving of £500.
The new tax regime was unveiled by Professor Mark Drakeford, the Welsh government’s finance minister, who described it as “fair and progressive”.
Drakeford said: ““From April, Wales will introduce the first Welsh taxes in almost 800 years, supporting first-time buyers and boosting business. The devolution of tax powers provides us with the opportunity to reshape and make changes to improve existing taxes to better meet Wales’ needs and priorities. I have always been clear that we will use these powers to help improve fairness and support jobs and economic growth in Wales.”
Earlier this month, the Association of Accounting Technicians (AAT) called on the UK government to amend stamp duty so that it is paid by vendors rather than buyers.