North Wales MS Mark Isherwood has today challenged the Welsh Government over its higher rates of Land Transaction Tax (LTT) which he said is penalising small and medium businesses.
Questioning the Finance Minister in today’s meeting of the Welsh Parliament, Mr Isherwood, who in February warned that the new higher rates would risk serious consequences for both housing provision more widely and legitimate self-catering businesses across Wales, already hit hard by the pandemic, today quoted a constituent who is keen to purchase a currently unhabitable house and turn it into a holiday let, but is put off by the extortionate higher rates LTT in Wales.
He said:
“Speaking here in February, I stated that “the Welsh Government’s increased Land Transaction Tax Higher Rates, which hit large numbers of legitimate small and medium sized businesses, many of them with properties near the internal UK border with England, are higher than equivalent ‘Stamp Duty Land Tax’ Higher Rates in England for purchase prices up to just £125,000, and higher than for all purchase prices in England above just £180,000, even after the higher rates holiday introduced by the UK Government in response to the COVID pandemic come to an end”.
“Further, higher rates of Land Transaction Tax are levied on the purchase of properties to rent, as well as second homes.
“How do you therefore respond to the constituent who e-mailed last week, 'I have a small holiday let business and the house next door to me came on the market, being sold through a local estate agent. I wished to renovate it and use it as a holiday let, not a second home. I have found that it is subject to a LARGE amount of land transaction stamp duty. The house is not habitable, and I am trying to encourage people to visit Wales and bolster the economy'?
In her response, the Minister stated:
“Although we do understand the importance of tourism to many communities in Wales. It's a very difficult balance, but we're very keen to ensure that people are able to find affordable housing to live in in their own communities. Part of that's about using tax.”
Speaking afterwards, Mr Isherwood added:
“The Welsh Government should stop blaming the affordable housing shortage in holiday home hotspots on legitimate local businesses and second home ownership, and start taking responsibility for causing the social and affordable housing supply crisis in Wales from devolution in 1999, despite repeated warnings”.