New Stamp Duty rates announced for Wales: Some buyers will pay thousands more than in England

Huge changes in Stamp Duty payable by house buyers in Wales have been announced.

Although the changes will, according to the Welsh Government, mean that nine out of ten buyers will pay the same or less than they do at the moment, there will be big winners and losers.

The changes also mean that some home buyers in Wales – those paying more than £400,000 –  will pay more than their counterparts in England.

For example, someone buying a £500,000 home in Wales will pay £17,500 in Stamp Duty, compared with £15,000 in England.

On a £6000,000 home, the bill in Wales would be £25,000, compared with £20,000 in England. And on a £750,000 house, the Stamp Duty in Wales would be £36,250, compared with £27,500 in England.

It is above homes worth over £750,000 that the Stamp Duty is really set to climb in Wales, to 10%. Properties above £1.5m will attract a new rate of 12%.

However, buyers of small homes worth under £250,000 will pay up to £500 less in Stamp Duty, and those buying at up to £150,000 will escape the tax altogether.

In Wales, Land Transaction Tax will replace Stamp Duty Land Tax from next April 1. It is the first Welsh-only tax in almost 800 years.

Mark Hayward, chief executive of NAEA Propertymark, said: “This is a welcome move for the Welsh housing market and we’re pleased the Welsh Government has listened to our proposals to raise the band for this lower rate. The rate up to which buyers won’t have to pay any Stamp Duty will be £150,000 from 2017 – the same value as the average house price in Wales.

“This means a huge number of house buyers will no longer have to pay any Stamp Duty at all. However, the move creates further bands for properties in excess of £250,000, and those properties will now attract a higher rate of Stamp Duty Land Tax than they would have previously.”

Changes to Stamp Duty Land Tax imposed by previous Chancellor of the Exchequer George Osborne, who abolished the so-called ‘slab’ structure,  have had mixed results – and led to criticism that hikes in purchases of the most expensive properties have severely slowed and damaged the London market. While purchasers of cheaper properties were intended to pay less, escalating property prices have in practice meant bigger bills for some home buyers.

The current rates:

  • Up to £125,000 no tax
  • Between £125k and £250k 2%
  • Between £250k and £925k 5%
  • Between £925k to £1.5m 10%
  • Above £1.5m 12%

The new rates in Wales

  • Up to £150,000 no tax
  • Between £150k and £250k  2.5%
  • Between £250k and £400k 5%
  • Between £400k and £750k 7.5%%
  • Between £750k to £1.5m 10%
  • Above £1.5m 12%

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5 Comments

  1. VFMagents

    Erm, the list of the new rates in Wales is incorrect for properties between £250k to £400k and £400k to £750k. The new rates are 2.5% and 7.5% respectively.

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  2. Rosalind Renshaw

    Apologies for earlier mistake – now corrected, with thanks to VFMagents

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  3. daynehodgson42

    Do these new rates apply to additional properties as well?

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    1. VFMagents

      Yes, but you’ll need to add an additional 3% on top (unchanged from the current Stamp Duty regime)

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  4. JayWoods67

    Feel free to delete this (because it’s an “unsolicited” link), but there is already a Land Transaction Tax calculator for anyone who wants to see what the new LTT will be like.

    It also lets you compare it with the existing SDT at a clink (or tap!)

    https://stamp-duty-calculator.co.uk/land-transaction-tax-calculator

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