Are you thinking of buying a house in Wales? If so, it may be in your interest to act fast. We would like to take this opportunity to remind house buyers in Wales that the current Land Transaction Tax holiday is currently due to end on 31st March 2021.
What is the Land Transaction Tax Holiday in Wales?
Land Transaction Tax (LTT), the Welsh equivalent of Stamp Duty, is the tax on a house purchase. LTT is usually applicable to all property sales where the purchase value exceeds £180,000. However, in response to the ongoing Covid crisis, the Welsh Government has extended this upper limit to give an LTT – or stamp duty – holiday.
The new measure, which came into effect on 27th July, means home buyers no longer have to sacrifice 3.5% of the value of their property to LTT, up to a maximum £250,000 house value.
You can read more about this in our post: How Are Rishi Sunak’s Stamp Duty Changes Affecting the Property Market in Wales?
How Much Can Welsh Home Buyers Save?
In Wales, it is estimated that around 80% of homebuyers liable for the main rates of Land Transaction Tax, will save approximately £2,450 per transaction during the current holiday.
On average, Howells Solicitors complete over 1,000 house sales and purchases each month, on behalf of clients buying properties in Wales and England. In England, houses buyers can currently benefit from a similar holiday having been applied to Stamp Duty Land Tax; this will also end on 31st March 2021.
Delays and Industry-Wide Bottlenecks: Don’t Wait Until March
Mark Hobbs, Managing Director of Howells Solicitors, is concerned that home buyers may miss the benefits provided by the current tax holidays. This is because the significant upturn in property transactions added to the lockdown is creating a bottleneck for transactions in the system. The searches provided by local authorities are taking significantly longer to be processed, as are surveys and offers of mortgage. He stated:
“Whilst the end of March is still four months away, house buyers need to be aware that the purchase of their property has to be completed on or before 31st March 2021, in order to be eligible.”
“The housing market has bounced back since the first lockdown, with many of the estate agents we deal with reporting record daily sales numbers. Property website Zoopla has had its busiest third quarter on record, with 140,000 more buyers than the same period last year. The results of this increased activity have created a surge in demand for conveyancing services, which are reliant on local authorities, mortgage lenders and surveyors to complete the house purchases.”
Home buyers should also be aware of the two-week Christmas period, which can sometimes cause delays. Overall, there are a number of reasons a house purchase may take longer to complete, so starting the process sooner rather than later could save you money.
Will the Government Extend the Deadline?
Undoubtedly, for some of the reasons given, some transactions are likely to miss the LTT holiday. Because of this, the conveyancing industry has been pressing the Government to extend the 31st March deadline, to assist those who might otherwise miss out.
With guidelines and restrictions still in place to help stop the spread of Covid-19, the opinion of the industry is that an extension of the LTT holiday in Wales would be hugely beneficial. However, it is by no means assured.
Get in Touch for a Free, Non-Obligatory Conveyancing Quote
If you are looking to move house in Wales, you’ll need an experienced and competent conveyancer to ensure you meet the LTT holiday deadline.
To find out more about our very competitively priced, multi-award winning conveyancing services, get in touch today.