Yes its finally happened. The Welsh government have announced changes to the Stamp Duty tax for homebuyers in the country. This article talks about the key differences and what it means for the people of Wales. These new rates will come into play in 2018.
First thing they have done is increased the first stamp duty threshold from a house valuation of 125,000 to 150000. So now there is no stamp duty if you buy a house up to 150,000. So this is good news for first time home buyers. They can have more choice than previously and not expect to have to fork out 2% for stamp duty. We consider this a good move by the Welsh government.
The next bracket of homes valued up to 250,000 are taxed at 2.5%. This is an increase of 0.5% compared to the current tax rate. So this is sad news for potential buyers in this bracket.
As previously purchases between 250,000 and 400,000 are taxed at the same rate of 5%. So if you are purchasing houses within this range you are not affected by the changes in Stamp Duty.
However houses above 400,000 will be charged a stamp duty of 7.5%. This is up from 5% in the current situation. And things then get worse if you are earning between 750,000 and 925,000. In the current plan this group would be taxed at 5%, but going forward in the new plan this tax has doubled to 10%.
Finally and quite strangely it seems that for houses above 1.5m there has been no change in tax.
So overall we see a tax breaks for the houses between 125,000 and 150,000. Which is very much welcomed. This falls in line with the average house price in Wales which is saif to be around 150,000. Hence this is considered a strong and affective move. However it seems that the middle to upper class striving to own a home between 400,000 and 925,000 is a lot worse off under this new system. Especially if you are purchasing a house between 750,000 and 925,000. Finally as they saying goes ‘The fat cats always seem to win’. Houses above £1.5m are not affected, no increase, and no decrease. They still pay 12% as normal.
Are you affected by these changes? If so please get in touch we would love to hear from you!