The Welsh Government has published a summary of responses to its earlier Land Transaction Tax (LTT) consultation which proposed changes to reliefs, including the abolition of Multiple Dwellings Relief (MDR).
Background
The original consultation, which closed on 19 May 2024, proposed:
- The abolition of Land Transaction Tax (LTT) Multiple Dwellings Relief (MDR) from 1 June 2024.
- The extension of the existing LTT relief when purchasing property for social housing purposes to Welsh local authorities. It was intended that this extended relief would be broadly the same as that currently provided to registered social landlords.
Views were also invited on other possible LTT changes, including:
- The abolition of the LTT relief provided on the purchase of six or more dwellings in a single transaction.
- The potential review or amendment of other LTT reliefs.
Outcome
The consultation received 38 responses.
- Views on the abolition of MDR ranged from strong agreement to strong disagreement.
- Support for retaining the relief cited commercial benefits and the importance of MDR to sectors such as private rental and student housing.
- Points in favour of abolition included increased revenues, tax simplification and the possibility of empowering individual taxpayers to buy their own homes rather than rent.
- The majority of respondents agreed with the proposal to extend the existing relief available to registered social landlords to Welsh local authorities.
- Most respondents were in favour of keeping the six dwellings rule.
- It was noted that larger investors in residential property, for example, those supplying accommodation for students or retirement living, would be negatively impacted. Some respondents also argued that abolition may reduce housing supply.
- A wide variety of other proposals were made, including some which may benefit the private rented sector and tenants of rented properties, local communities including those in Welsh-speaking areas, homebuyers and property developers.
Next steps
Addressing the impact of the previous abolition of Stamp Duty Land Tax MDR on the Welsh block grant remains a high priority for the Welsh Government.
The potential benefits, costs and wider impact of options regarding MDR and other LTT reliefs will now be investigated.
The Cabinet Secretary for Finance, Constitution and Cabinet Office will provide an update on plans regarding LTT reliefs in due course.
Useful guides on this topic
Welsh Land Transaction Tax (LTT)
What is Land Transaction Tax? How does it operate? What reliefs are available?
Welsh LTT vs SDLT: Comparing the rates and additional dwellings charge
How does Welsh Land Transaction Tax (LTT) compare to Stamp Duty Land Tax (SDLT)? What are the key similarities and differences?
Welsh LTT Rates
What are Welsh Land Transaction Tax (LTT) Rates? How do you calculate Welsh Land Transaction Tax?
External link
Welsh Government: Proposed changes to land transaction tax reliefs
