The Welsh Government has today announced it will change the rates and bands of Land Transaction Tax from tomorrow (22 December 2020). Lawyers in Wales and those in England working on transactions in Wales are ‘dismayed’ by the short notice, that comes barely 48 hours after Wales went into Alert Level 4.
David Greene, President of The Law Society of England and Wales, said:
“Solicitors in Wales and their counterparts in England who have clients purchasing homes in Wales are dismayed by the combination of the timing of today’s Welsh Government announcement of changes to the land transaction tax (LTT) and the short notice of those changes, which will commence tomorrow (22 December).”
“These last-minute changes come at a time when solicitors are under enormous pressure, facing the challenge of operating in a pandemic – with Wales just having adopted stricter measures – and working all hours dealing with the usual Christmas rush, clients wishing to move before the 31 March LTT holiday deadline and record numbers of transactions, which are being hit by delays in searches.”
“They now have clients who face paying thousands of pounds more if they are unable to proceed with their transaction within the very short notice period given.”
Mark Evans, Chair of the Law Society Wales Committee, said:
“As a cross border firm we are trying to adapt today to the new COVID restrictions imposed at the weekend. Many people are still looking to move before the Christmas holiday and all those involved in the housing market been working on the basis that the rates will not change until the end of March 2021.
“To be informed as to overnight changes to the rates of Land Transaction Tax is unfortunate and may impact on chains across England & Wales.”
“Having confirmed that the LTT holiday will end on 31 March 2021, the Welsh Government must remain vigilant to ensure the right balance of stability, fairness and confidence in the market is in place.”
In response to protests on Twitter today, the Welsh Treasury posted:
This supports #Covid19 recovery and will generate approx £10m in additional revenue for our public services. /2 #WelshBudget @wratweet @LawSocWales @TheLawSociety @ICAEW_Wales @CIOTNews @naea_uk @seneddfinance @cardifflawsoc @wwlawsoc @monlawsoc @BevanFoundation @WelshLGA
— Welsh Treasury (@WelshTreasury) December 21, 2020
Changes for higher rates residential property
The higher residential rates of LTT will increase by 1% across all bands on 22 December 2020.
If you complete on buying a property:
- before 22 December you pay the previous rates of tax
- on or after 22 December you pay the new rates of tax
In most cases where you have already exchanged contracts, but not completed you will be able to use the previous higher rates.
Updated higher rates: quick guide.