Wales ups Land Transaction Tax threshold – and slams the UK government

Wales has increased the Land Transaction Tax (stamp duty equivalent) threshold in the country from £180,000 to £225,000, meaning anyone buying a property less than that amount won’t pay any tax.

The change will take effect on 10 October.

Unlike in England the government will target big spenders with the changes, as people buying a property worth more than £345,000 will end up paying more.

Rebecca Evans

Between £225,000 to £400,000 there will be a 6% rate, a 7.5% rate between £400,000 and £750,000, 10% from £750,000 to £1.5 million, and 12% over £1.5 million.

Typical house prices are £240,000 in Wales, so most should benefit from the change.

The announcement was made by finance and local government minister Rebecca Evans, who said changing the LTT thresholds was being considered prior to the changes made by the UK Chancellor in England Kwasi Kwarteng last week.

Evans was highly critical of last week’s succession of tax cuts, which have spooked the markets and rocked the value of the pound.

She said: “The package was deeply unfair and morally indefensible.

“It completely failed to target urgent and meaningful support to vulnerable households impacted by the cost-of-living crisis, and left public services, currently stretched beyond any recent experience by inflation, without the critical additional funding that they need this winter.

“Through his statement, the Chancellor ignored all of this and instead prioritised tax cuts for the rich, unlimited bonuses for bankers, and protected the profits of big energy companies.

“It will have significant economic and social consequences and will cost individuals and families in Wales dearly.”

She added: “I think that it’s been well reported now that the view generally is that the Chancellor has just taken a huge gamble on the nation’s finances.

“Never gamble more than you can afford to lose. But unfortunately, the Chancellor’s gambling with more than just his own life – he’s gambling with those of everybody in this country, and people who can’t afford to lose.”

The Welsh Conservatives welcomed the Land Transaction Tax change, but felt it should have gone further.

Peter Fox, finance spokesman, said: “Last week the UK Conservative government took bold and decisive action to put aspiration, opportunity and growth at the heart of the economy.

“House prices in Wales have now hit £240,000, yet the Labour Government in Cardiff Bay is firmly slamming the door in the faces of first-time buyers by refusing to provide specific support for them.”

Addressing the mini-budget from Liz Truss’s government, Evans criticised the abolition of the 45% tax rate for those earning over £150,000, calling it a “shocking policy” at a time when those on lower incomes are struggling.

She also spoke out at the government’s failure to offer more support through welfare benefits and housing, as well the lack of a windfall tax on energy firms.

Evans added: “Instead, the Chancellor has chosen to drastically increase public borrowing, leaving lower income households to shoulder the impact for years to come,” she said.

“The statement failed to set out a comprehensive vision for investment to boost economic growth, improve our energy security for the future and address the climate emergency.”

The mini-budget plans to bring forward a planned cut to the base rate of income tax from 20% to 19% to April.

But Plaid Cymru’s Llyr Gruffydd called for the Welsh government to use its income tax powers keep it at 20%.

He said: “Doing this would offer an additional £200m a year to the Welsh Government’s budget which can be used directly to help ease the pressure of the cost-of-living crisis, protect public services and shield the vulnerable from Tory cruelty.”

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