Associations lament Wales stamp duty decision

Ryan Bembridge

October 18, 2016

stamp duty

Landlords and letting agents are disappointed that the 3% stamp duty surcharge will continue in Wales after it devolves the tax in April 2018.

Wales is replacing stamp duty with its own Land Transaction Tax, but its move to keep the surcharge hasn’t gone down well with the Association of Residential Letting Agents (ARLA) and the Residential Landlords Association (RLA).

David Cox, managing director of the ARLA, said: “We are disappointed that the Welsh government has decided to take this decision and followed the rest of the UK in implementing this punitive regime for buy-to-let landlords.

Man jailed for remortgaging his parents’ house

“We have been highly supportive of the new devolved tax regime in Wales precisely because it was a way that it could set its own tax agenda that works best for the housing sector in the region.

“In continuing with the surcharge, the Welsh government is not making the most of its new powers in order to increase the supply of homes that Wales so desperately needs.

“The measures will lead to increased rent prices through a fall in supply and increasing demand.

“Tenants will also see additional costs passed onto them, as landlords look for ways to increase the profitability of their properties in the face of spiralling expenses.

“Ultimately, this will lead to sub-standard accommodation as money, previously used for the up keep of homes, will be swallowed up in tax payments.”

And Douglas Haig, RLA director for Wales, said: “It is disappointing that the Welsh government didn’t take the opportunity to remove this restrictive taxation as the PRS is vital to solving the housing crisis here in Wales.

“However we are pleased to see the Minister is looking at exploring exemptions and look forward to working with him and his department to this end.”

Make Drakeford, Welsh finance secretary, had said: “This levy will exist in Wales when land transaction tax – the successor to stamp duty in Wales – comes into force. The vital revenue generated will continue to help fund our valued public services.

“It is important we use the opportunity of tax devolution to consider whether changes can be made to improve efficiency, effectiveness and create a focus on Welsh needs and priorities.”