News: Wales to Replace UK Stamp Duty with ‘Land Transaction Tax’
Wales has proposed its first new tax in 800 years, in a monumental step towards devolution for the Welsh National Assembly. If the legislation is approved, Land Transaction Tax (LTT) will officially replace the current UK Stamp Duty Land Tax (SDLT) from April 2018 onwards.
Finance Secretary Mark Drakeford has described the legislation as “a historic milestone in the devolution of tax powers to Wales,” and went on to say that the bill “marks another step towards the creation of taxes which are more suited to the needs of Wales and support Welsh public services.”
What Will Changing to LTT Mean for the Welsh Property Market?
Broadly speaking, LTT will closely mirror the UK’s SDLT; however, taking guidance from Scotland’s Land and Building Transaction Tax (LBTT) – which replaced the UK Stamp Duty Land Tax in April 2015 – Wales’s LTT bill does include efforts to address tax avoidance.
An announcement regarding the rates of the new tax will be made closer to 2018, in order to ensure that it takes the economic climate of that time into account.
If the bill passes, the £170m raised by SDLT on the 55,000 property transactions in Wales during 2014/15 is set to rise to £244m during 2018-19.
Drakeford asserts that “by replacing stamp duty land tax with a new made-in-Wales land transaction tax, public services in Wales will continue to benefit from the revenues raised by this important tax.”
The additional 3% stamp duty imposed on the purchase of second homes and buy-to-let properties – introduced in April this year – is also said to be under consideration.
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