Completion dates loom as Land Transaction Tax cut set to end as house prices rise 8%

Wrexham’s house prices saw a rise during the pandemic, with many property transactions well underway to beat a taxation change deadline.

Land Transaction Tax is the tax that replaced stamp duty in Wales, and yesterday Welsh Government issued a short updated confirming the nil rate would be ending as expected later this month.

The update from the Welsh Revenue Authority noted, “As previously announced by Welsh Government, the nil rate band of Land Transaction Tax (LTT) for residential property transactions will revert to £180,000 on 1 July 2021. There are no transitional rules. A transaction will need to have completed before Thursday 1 July 2021 to use the temporary increase to the nil rate band.”

The temporary reduction period of the tax, aimed at helping the economy and property sector during the pandemic, was extended once before by three months.

At the time the tax change was explained as, “In the period August to January, this targeted tax reduction has supported 10,000 taxpayers in Wales who were liable to the main rates of land transaction tax. These were, broadly, people buying their homes, and who may have needed additional support due to the pandemic. It has increased residential property transactions in 2020-21, from that which would otherwise have occurred, and had a positive effect on the housing market.”

Data from the Principality Building Society, working with Acadata, indicates that the average house price in Wales hit £212,000 during the first quarter of 2021. Wrexham saw an average annual change of +8% and +4.3% quarterly change with the average price now £198,994.

Overall Wales saw a 10.1% rise, with a 40% increase in the number of transactions comparing Q1 2020 with Q2 2021. The 10.1% rise was the first double-digit percentage increase since 2005..

The latest data on earnings does not match the same period, however data available shows median gross weekly earnings for full-time adults working in Wales increased by 0.6% between 2019 and 2020, compared to a 5.1% increase between 2018 and 2019.