Could house buyers in Wales soon be looking for properties over the border following Chancellor Rishi Sunak’s stamp duty holiday announcement?
A temporary holiday on stamp duty has been granted for the first £500,000 of property sales.
The chancellor announced the measures in his Summer Statement on Wednesday, which came into immediate effect.
But, as the changes only affect England and Northern Ireland, what does it mean for buyers in Wales?
Do we pay stamp duty in Wales?
Stamp duty is a tax paid by people buying properties, although it varies slightly across the UK.
In Wales, stamp duty is devolved. It is known as the Land Transaction Tax.
The new system was announced by the Welsh Government in October 2017 and came into force in April 2018.
How much do we pay in Wales?
No tax is paid on the first £180,000 of a property, then it increases to 3.5% up to £250,000 and 5% up to £400,000.
First-time buyers in Wales don’t get any discounts or exemptions on Land Transaction Tax.
In Cardiff, where the average property price is £216,063, the buyer would pay £1,262.21 in tax.
In Monmouthshire, which has the highest average house prices in Wales at £275,656, buyers would pay £3,732.80.
But on Anglesey, where the average house price only just eclipses the threshold at £180,505, the Land Transaction Tax would amount to only £17.68.
Land transaction tax rates
What about buy-to-let and second homes?
Those looking to buy second homes or buy-to-let properties in Wales have to pay an extra 3% in Land Transaction Tax.
What are the house prices like across Wales?
The average price of a property in Wales is £161,719, which falls under the threshold for Land Transaction Tax.
The cheapest properties can be found in Blaenau Gwent, at an average of £87,977.
Monmouthshire house prices are the highest across Wales, at an average of £275,656. As the county borders England, the changes to stamp duty announced yesterday could have the biggest impact here.
Might Welsh buyers be lured over the border?
Jean Fry Thomas, a director of Bidmead Cook estate agents in Blaenau Gwent, said people interested in properties on the Wales-England border could be persuaded to buy in England.
“There’s a big difference in what you can save – it’s somewhere in the region of £15,000 if you want to buy in England,” she said.
“If you were buying the same property in Wales it would cost you £17,450 stamp duty.
“Along the border very often the houses are very similar.
“If you’re travelling to work maybe a couple of miles isn’t going to make much difference to you and in the short term (buying in England) is going to save you a lot of money.”
What’s been the reaction in Wales to yesterday’s announcement?
Calls have been made for the Welsh Government to introduce a similar scheme in Wales to reduce Land Transaction Tax.
Darren Miller, Member of the Senedd for Clwyd West, told BBC Wales: “What we really need now from the Welsh Government is for them to pick up the ball in terms of reducing our Land Transaction Tax in order that we can mirror some of the changes to the stamp duty holidays which were announced yesterday which will apply in England.”
The Welsh Government’s finance minister Rebecca Evans said: “We are actively considering what the SDLT (Stamp Duty Land Tax) changes mean for our tax rates aligned with our plans to reopen the housing market.
“We will continue to deliver tax policy that is made in Wales that is appropriate for the economic recovery.”