Welsh landlords ‘baffled’ as higher Stamp Duty revealed

Wales has followed England and Scotland and raised stamp duty for landlords who buy properties.

Mark Drakeford, the Welsh Cabinet Secretary for Finance, told fellow Senedd members that the country’s draft budget will include a 1% increase in Land Transaction Tax, which is its equivalent to stamp duty, for landlords.

The introduction of the higher rate is immediate – a landlord completing on a BTL purchase yesterday would have paid 1% less Land Transaction that a counterpart completing today.

Drakeford also said a loophole in the country’s tax rules, which enable some property investors to claim both multiple dwelling relief and ‘subsidiary dwelling exemption’ would be closed..

Until yesterday, depending on the value of the property being bought, landlord and second home buyer rates for Land Transaction Tax started at 4% for the first £180,000 and then rose in ‘slabs’ to 16% for properties over £1.5 million, rates all of which have now risen by 1%. See full list below.

Drakeford, who also revealed increased spending on affordable homes, backed the tax increase saying that the higher rates brought Wales “broadly into the line with changes to stamp duty land tax across our border, and is expected to raise an additional £7 million for public services next year”.

For England and NI, Chancellor Rachel Reeves recently increased stamp duty for landlords by 2% to 5%. And in Scotland, this was raised last week to 8%.

Industry reaction

Ben Beadle, Chief Executive at the National Residential Landlords Association

“This move by Welsh Government will do nothing to help renters who are already struggling to find a home to rent,” he says.

“To discourage investment in the market with punitive taxation, at a time when Wales needs many more homes for rent, is a frankly baffling move.

“Today’s announcement will worsen the ongoing shortage of homes, narrow tenant choice, increase rents and cause misery for tenants.”

Tim Thomas, Policy and Campaigns Officer at Propertymark

“Propertymark is disappointed that Land Transaction Tax for additional properties has increased by 1%,” he says.

“The investment in affordable and social homes is welcome, but until social housing supply keeps up with demand, we called for the surcharge on additional properties to be cut to stimulate supply in the private rented sector.

Full rate list

• £0 – £180,000 – 5%
• More than £180,000 – £250,000 – 8.5%
• More than £250,000 – £400,000 – 10%
• More than £400,000 – £750,000 – 12.5%
• More than £750,000 – £1.5m – £15%
• Above £1.5m – 17%