Average buyer set to be £560 better off under property tax change in Wales
The average home buyer in Wales will be £560 better off because of changes to property tax which see a new Land Transaction Tax come into effect on 01 April, new research shows.
However, those buying a property worth more than £402,000 will be worse off as they will pay more than they would have under the previous stamp duty tax regime, according to research from removal comparison firm Compare My Move.
Buyers in Powys are set to make the biggest saving at £1,095, followed by Ceredigion and the Isle of Anglesey, where the average home buyer will save £1,088 and £1,064 respectively.
Areas where average prices are below the stamp duty threshold will see no change while second home owners will also pay less with the higher rate if the property is below £402,000.
A £1,000,000 property will accrue £61,200 in Land Transaction Tax, compared to £43,750 that wold have been required in stamp duty, the research also shows.
With the current average house price in Wales at £153,034, the average home buyer would have paid £560 in stamp duty before the change but under the new Land Transaction Tax (LTT) rules, the average home buyer would pay no rate on this purchase price.
The price bands and percentages differ between the LTT and stamp duty, but the biggest winners stem from the changes in the low end threshold. The fact that the 0% rate threshold has been raised to £180,000 means that areas with average house prices close to this amount are naturally the winners from this change.
The firm said it is worth noting that more expensive areas benefit less, for example the average home buyer in Monmouthshire will have to fork out £2,277 in LTT which is only a saving of £124 in comparison to stamp duty.
Second home owners and those looking to buy to let will face the higher rates as it comes with an extra 3% for additional homes. Because of this, second home owners are actually better of buying in Wales for certain priced homes. For properties less than £402,000, second home owners in Wales will pay less than the equivalent stamp duty.