Friday, May 20, 2022

Landlords call for removal of new tax on buy-to-let homes

homes rise

Landlords are calling for the Welsh Government to partially remove a charge on people buying houses to let.

Buyers currently pay an extra 3% levy on their stamp duty when purchasing a property to rent out.

A landlord group wants the new Welsh Land Transaction Tax (LTT) to remove the levy where a landlord is adding to the housing supply.

The Welsh Government says the revenue made by the higher rate is “essential to the delivery of public services”.

LTT will replace stamp duty in Wales in 2018.

The Residential Landlord Association (RLA) says the levy will limit supply and push up rents and wants it scrapped “where landlords invest in housing adding to the net supply of homes”, such as new builds.

Douglas Haig, vice chairman of the Residential Landlords Association and its director for Wales said: “The government has rightly made boosting the supply of housing, including homes to rent, a priority.

“Whilst we believe the planned levy on homes to rent out will most hurt vulnerable tenants needing a place to live, the assembly has an opportunity to make constructive changes to the bill to rectify this and back the nation’s tenants.”

A Welsh Government spokeswoman said: “Respondents to our consultation about the higher rate expressed a clear view about the importance of maintaining a single, consistent rate across the UK when stamp duty is devolved to Wales in April 2018.

“Last month the Office for Budget Responsibility forecast the additional revenue from the higher rate in Wales will be £58m in 2018-19.

“This funding will be essential to the delivery of public services across Wales.

“We will monitor the impact of the higher rate in Wales and will assess evidence as it emerges to ensure the land transaction tax higher rate remains appropriate for Wales.”

The 3% levy was introduced last year by the former chancellor George Osborne.

The RLA says a landlord buying an average-priced house in Wales (£147,000) to let now pays £4,850 in stamp duty, £4,410 more than under the previous system.


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