Scottish and Welsh Governments have confirmed the temporary tax cuts to allow all homebuyers in the UK to benefit from low stamp duty costs. The Chancellor, Rishi Sunak, recently announced that Stamp Duty Land Tax (SDLT) in England and NI would be slashed for all properties worth up to £500,000 until the end of March 2021. Additionally, first-time buyers already benefited from paying no Stamp Duty costs on the first £300,000 and a reduced rate up to £500,000 which has now been cut to zero. It has also been confirmed that landlords and those buying their second homes will also be eligible for the reduction. However, second home buyers will still have to pay the 3% stamp duty charge that applies when purchasing additional properties.
Different rules apply through the UK countries as Scotland and Wales set their own land taxes. The following is what the Welsh Governments have announced:
Land Transaction Tax (LTT) in Wales
Homebuyers in Wales will see the threshold at which Land Transaction Tax is payable rise to £250,000, coming into effect by 27th July. No stamp duty is currently payable on properties in Wales that cost up to £180,000. Therefore, the changes will mean that a person buying a house worth £250,000 will now be saving a maximum of £2,450. The higher threshold will remain until 31st March 2021, which is the same day that stamp duty measures finish in England, NI and Scotland.
Buying an additional property in Wales
Whereas in England, Northern Ireland and Scotland, homebuyers purchasing additional properties will benefit from the temporary higher stamp duty thresholds, those in Wales won’t.
The LTT thresholds in Wales are remaining uncharged for those buying additional properties, meaning that buyers will have to pay the extra 3% surcharge. For example, someone buying a second home in Wales costing £200,000 will continue to pay LTT at 3% on the first £180,000, and 6.5%, on the remaining £20,000 whereas someone purchasing a property which will be their only residence won’t have to pay any LTT, assuming the transaction completes on or after 27th July and before 31th March next year.