THE PARTIAL lifting of Wales’ Land Transaction Tax (LTT) means buyers face the prospect of forking out more for a property valued at the same price just miles apart.
Homebuyers will not pay tax on properties costing up to £250,000, but any property over this threshold is still taxed.
It follows the lifting of Stamp Duty in England last week but is only half as generous.
Across the border, the cap is £500,000.
Finance Minister Rebecca Evans said the decision to set the threshold at £250,00 was to “ensure the fairest balance”.
“This tax holiday will help first time buyers as well as those selling to move on, but we are taking a different direction to support jobs and house building in Wales.”
Monmouth’s proximity to the border crystallises the dilemma those looking to buy properties over £250,000 now face.
In Monmouth, a four-bedroom home, ideal for a family, is listed for £350,000.
(This four-bed home is ideal for a family. Picture: Parrys/RightMove.)
And in Coleford, twelve miles away, a three-bedroom home ideal for a family is also listed at £350,000.
For the property in Monmouth, you would have to pay £5,000 in LTT as opposed to nothing in England.
(The three bedroom home in Coleford. Picture: Steve Gooch/Rightmove.)
While the house in Coleford has one fewer bedroom, it is still detached and has a similar garden space as the home in Monmouth.
And across the Wales-England divide, there are more examples of similar properties priced the same, but with one crucial difference: Land Transaction Tax.
It leaves would-be buyers with a difficult decision to make.
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The new measures will be introduced in Wales on Monday, July 27 and last until March 31, 2021, in line with England and Northern Ireland.
The breakdown of properties worth more than the threshold of £250,000 is as follows:
- Properties priced at £250,000 to £400,000 are eligible for five per cent LTT.
- £400,000 to £750,000 = 7.5 per cent LTT
- £750,000 to £1,500,000 = 10 per cent LTT
- More than £1,500,000 = 12 per cent LTT
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