fbpx
HCR Law Events

22 December 2020

Property tax changes – Welsh government’s draft annual budget announcement

Key changes
The Welsh government has published its draft budget for 2021-2022, setting out changes in the following areas:

  •  Land Transaction Tax
  •  Landfill Disposals Tax

Tables have been published showing the changes in detail. These can be found on the Welsh government website here. In summary:

Land Transaction Tax (LTT) – residential

The Welsh government will not extend the current LTT temporary tax reduction for tax paid on residential properties to be used as a main residence beyond 31 March 2021.

Furthermore, the higher residential rates tax bands of LTT are each being raised by one percentage point. Buyers of residential properties will therefore pay 4% of the cost of the property over and above the main residential rates. This will take effect immediately, from 22 December 2020.

Land Transaction Tax (LTT) – non-residential

The starting threshold on LTT paid on non-residential property purchases will increase by 50%. This means no tax will be paid on purchases costing up to £225,000 with immediate effect from 22 December 2020.

Changes are also being made to the ‘relevant rent’ that applies to non-residential lease acquisition transactions. The relevant rent amount will increase from £9,000 to £13,500. This change is planned to come in to effect in early February 2021.

Landfill Disposal Tax

From 1 April 2021 Landfill Disposal Tax rates will be raised in line with inflation. Exact figures are set out in Table 4 on the Welsh government website here.

What this means for you

Prospective buyers should be aware of timescales when seeking to make the best decision. The timescales are summarised as follows:

  • 22 December 2020:
    The higher residential rates tax bands of Land Transaction Tax are being raised to 4%. The starting threshold on the Land Transaction Tax paid on non-residential property purchases is being raised by 50%.
  • Early February 2021:
    The relevant rent amount in non-residential lease acquisitions will increase from £9,000 to £13,500.
  • 31 March 2021:
    End of current Land Transaction Tax temporary tax reductions.
  • 1 April 2021:
    Landfill Disposal Tax rates will be raised in line with inflation.

A note on Welsh rates of income tax

For Welsh rates of income tax, the three rates will remain at 10p for 2021-2022. This means that for the moment, Welsh taxpayers will continue to pay the same rates as their English and Northern Irish counterparts.

Share this article on social media

About the Author
Sarah Woodall, Head of Tax, Partner (Barrister)

view my profile email me

Got a question?

Send us an email

x
Newsletter HCR featured image

Stay up to date

with our recent news

x
LOADING