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New land tax has huge impact on average house prices

The introduction of the Land Transaction Tax (LTT) to replace stamp duty in Wales has had a significant impact on house prices, according to the latest data from LSL.

National average prices in Wales have increased by 4.8% annually, while prices in Cardiff and Swansea have risen by almost 10% during the same period.

Meanwhile, average prices in Monmouthshire (11.3%), the Vale of Glamorgan (10.2%) and Torfaen (10.4%) have also grown rapidly on an annual basis.

LSL says that these sharp rises are due to buyers pushing through purchases before LTT was introduced to avoid paying more tax on higher valued homes.

A similar situation unfolded in 2016 ahead of the introduction of a 3% stamp duty surcharge on the purchase of second homes and additional properties.

During March, six of the eight most expensive local authority areas in Wales set new price peaks. However, according to LSL, such high price growth is likely to be short-lived.

The LTT starts at a higher base (£180,000) than stamp duty in England (£125,000), but at a higher rate, particularly for properties priced between £400,000 and £925,000, with respective tax rates at 7.5% and 10%. 

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