The Welsh government has been sharply criticised for failing to recognise the impact of its decision to increase land transaction tax – the Welsh version of stamp duty – on second homes in Wales.
The move, announced as part of the Welsh government’s budget for 2021-22, is expected to raise £13m for social housing.
It will see second homeowners paying a 4% levy when they buy properties up to £180,000, rising to 16% for homes worth at least £1.6m.
But the changes to land transaction tax, which comes just two days after Wales entered the latest coronavirus lockdown, has been described as “unacceptable” by the National Residential Landlords Association (NRLA).
John Stewart, deputy policy director for the NRLA, said: “This is simply unacceptable to increase the rate of additional property Land Transaction Tax in this fashion. This increase will destabilise the private rental market in Wales, increasing costs on buying homes with immediate effect.
“Anyone buying a new home, before they can sell their current principle residence, will have to find this extra money up front. This may also cause some transactions to collapse and cause further hold-ups for anyone caught in a chain.
“The start of a national lockdown is not the time to put additional burdens on a sector already facing some of the longest and most severe Coronavirus restrictions and will deter investment in rental properties that we so badly need.”
But the budget announcement has been defended by finance minister Rebecca Evans, who also confirmed that the stamp duty holiday will not be extended in Wales.
She has said the budget would mean “difficult choice” as extra Covid-19 funding dries up.
While Wales received an extra £5bn in funding from the UK government this year to deal with the pandemic, this will fall to £766m, in 2021-2022.
Evans said the budget’s “progressive measures will support our businesses, economy and boost our funding for public services in the wake of the crisis”.
She added: “As we plan for our first steps beyond the pandemic, this budget is designed to protect health and our economy, build a greener future and create change for a more prosperous, more equal, and a greener Wales.”
Unlikely to yield much revenue at all but a move more politically driven as Welsh Labour feel the heat of the Yes Cymru campaign which is gathering momentum during COVID .
One of the central populist gripes of Yes Cymru is that the number of second homes in Wales add little to the local economy and makes life more difficult for local people to get on the Housing ladder. Prices rising making them unaffordable and beyond reach
Parodied by the “Cheshire Set” Lives in Wilmslow.
Summer in Abersock (Cheshire-by-Sea)
Winter Costa del Sol.
Parodi
Maybe some truth in that but jobs for local tradesmen and estate agents !
This move by the Welsh Senedd seen as somehow improving this situation . it will have no affect on house prices produce little revenue Forgetting that it is it their power to stimulate affordable housing by increasing supply side l
The irony is not lost that Ceredigion County Council allow second homers to register their holiday/second homes as a small business.Just a few boxes to tick. This entitles them to” small business rates relief “and much to the chagrin of the locals means that they pay no rates at all !
Not only that managed to trouser COVID grants to for voids
Taketh with one hand ,giveth with another .
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I always impressed at how well informed you are! Thank you for your insight on this and all the many financials in other posts. Merry Christmas!
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Typical socialist policy. Will hit local jobs and trades….but might win a few votes.
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