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Welsh land transaction tax: local variation proposals

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In a joint response to the Welsh government’s consultation on proposals to vary rates of land transaction tax in Wales at a local level, to address the impact of second homes and short-term holiday lets on the affordability and availability of housing in some areas of the country, the CIOT and Stamp Taxes Practitioners Group highlight a number of points:

  • using council tax to influence the type of occupation of a property is likely be more effective than a transaction tax;
  • the burden of a transaction tax ultimately disincentivises the transaction and, although levied on the purchase, can impose much of the real economic burden on the seller;
  • designing an additional rates charge would present various challenges, including defining and identifying ‘second homes’ and ‘short-term holiday lets’;
  • a system of charging local rates of LTT in addition to the existing national rates would add further stages to the conveyancing process and complexity to the administration of LTT;
  • if additional LTT rates are to be introduced in specific areas, an early awareness campaign will be required for taxpayers, conveyancers and estate agents in those areas; and
  • consideration should be given to the knock-on effects of the policy for the local tourism economy, if the availability of short-term holiday lets is reduced.
Issue: 1570
Categories: News
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