3% stamp duty for additional homes gets the go ahead in Wales

Tuesday 18 October 2016

In a disappointing move, the Welsh Government has announced that they will follow the UK's approach to revenue raising by keeping the 3% surcharge for additional homes post-devolution of Stamp Duty Land Tax powers. This continues what NAEA and ARLA MDs have called a "Punative regime" for Buy to Let landlords.

The announcement was made on 14 October by Finance Secretary Mark Drakeford following a consultation on proposals. Mark Drakeford said that “There was a clear view from respondents about the importance of maintaining a single, consistent rate across the UK" and said that the money raised from the levy will go towards funding public services in Wales.

Read the announcement from the Welsh Government

Mark Hayward, Managing Director of NAEA and David Cox, Managing Director of ARLA, comment on the Welsh Government’s decision to continue the additional 3% stamp duty surcharge on additional homes, when SDLT is devolved in April 2018:

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.

“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.”

Read our original response to the consultation