While we are supportive of the decision to devolve powers for property taxation to Wales, the Welsh government’s decision to follow the UK’s lead in adopting the 3% surcharge for additional homes is misguided and damaging for the property sector in the region.
The proposed surcharge will see increased costs for tenants as landlords look to recoup the costs of the additional tax. This will see standards fall as the ability of landlords to maintain properties adequately will decrease, and supply will be constricted as they drop out of the market. This is on top of further costs, including licence and registration fees that are specific to Wales, under the Rent Smart Wales scheme.
We have proposed a new way that would allow purchasers of more than one additional residential property, in the same transaction, to choose whether to pay the new Welsh Land Transaction Tax at non-residential rates or claim multiple dwellings relief. For those operating across both England and Wales, this can provide important consistency, help streamline their business transactions and retain clarity in the market.
In acquiring these new powers, the ability of the Welsh government to implement measures that would specifically address the challenges in the Welsh market was greatly improved, which is why it is so disappointing to see it following the UK government’s lead on this matter.
Mark Hayward, MD of the National Association of Estate Agents, and David Cox, MD of the Association of Residential Letting Agents