While there will be a lot of opinions regarding the Welsh Government, and whether it does enough for the country, there is no denying many people believe the UK Government would do well to follow the Welsh Government in some matters.
At Hunters Bridgend, we are naturally focused on the housing market. Therefore, it takes our interest when we see a number of property market professionals saying the UK Government should replicate the Welsh stance on land transaction tax, which is stamp duty in England.
Proactive calls are needed
There are calls to introduce a new tax hike on second properties.
The Welsh Government has recently announced that land transaction tax will be increased to 4%.
The changes in Wales include a 1% increase in the surcharge for purchases of “additional” dwellings by individuals and purchases of dwellings by companies, from 3% to 4%. The surcharge is currently 3% in England and Northern Ireland and already 4% in Scotland.
There have been some calls in England for the additional property stamp duty tax to be removed, as it is harmful to buy to let landlords, but there are many more calls for an additional charge to be put in place.
Sean Randall, a partner at tax and advisory firm Blick Rothenberg, and he believes the Welsh Government has made a smart move. Sean said: “Pressure will now be on the UK government to pass similar measures.” He also refers to the measure as a “proportionate response to the effect of the pandemic in Wales”.
There is also going to be a 50% increase in the nil-rate band for mixed or non-residential transactions, moving it from £0 - £150,000 to £0 to £225,000.
Will Wales lead the way?
Randall said: “The extra revenue produced by the higher surcharge, estimated at £13m, will be invested in social housing. The increased nil-rate band for non-residential [and mixed] transactions is designed to help businesses recover from the coronavirus pandemic. The Welsh government also announced that the stamp duty holiday will not be extended in Wales. It will end, as planned, for completions on or after 1 April 2021.”
Richard Pike from Phoebus Software has also backed the Welsh Government with this move. He said; “There are two questions that need to be answered. Firstly, what happens to any mortgages that are in the pipeline on 31st March? Secondly, with the country still paying the price of Covid-19 and the uncertainty that it has caused to personal finances, can the government actually afford to go ahead with the deadline?”
Richard Pike also said; “There is an argument that asks whether, while the market is moving and putting back into the economy, can they take the risk that end of the holiday won’t put the brakes on again? The murmurings are that there will be no extension, but perhaps an increase in second home surcharges and an increase for high value properties may be the better option?”
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