A leading property law expert says there is now pressure on Chancellor Rishi Sunak to raise stamp duty on buy to lets and holiday homes.
The claim comes from Sean Randall, a partner at Blick Rothenberg, who has responded to the shock short-notice rise in Wales’ Land and Transaction Tax (its equivalent of stamp duty) two days before Christmas.
The changes are a one per cent increase in the surcharge for purchases of so-called additional dwellings by individuals and purchases of dwellings by companies – this surcharge goes from three per cent to four per cent.
The surcharge in England and Northern Ireland is three per cent and in Scotland it is already four per cent.
The Welsh Government says the extra revenue produced by the higher surcharge, estimated at £13m a year, will be invested in social housing.
Randall says: “The measures are a proportionate response to the effect of the pandemic in Wales. Pressure will now be on the UK government to pass similar measures.”
At the same time as Wales announced its hike to the additional homes duty surcharge, the country’s housing minister – Rebecca Evans – revealed that the Welsh Government would not extend the current Land Transaction Tax temporary holiday.
This holiday mirrored the stamp duty holiday underway in England, where homes priced £500,000 or below have no duty payable if purchases are completed by March 31 next year.
Evans says: “We were clear this was a temporary measure to support the housing market in an unprecedented time. A return to the rates and bands which existed prior to 27 July will mean, again, Wales will be the only country in the UK with a starting threshold which is higher than the average price of a home.
“This means the majority of homebuyers will still not be liable for Land Transaction Tax and maintains this government’s progressive approach to taxation.”
This post has originally been featured in Letting Agent Today.