P-06-1445 Change Land Transaction Tax for First Time Buyers in
Wales to be in line with the UK Government – Correspondence
from Petitioner to Committee, 2 July 2024
Dear Members of the Petitions Committee,
Thank you for the opportunity to respond to the Welsh
Government's position on my petition P-06-1445. I appreciate the
detailed explanation provided. Here are my thoughts and further
points for consideration.
Thoughts on the
Document
While the rationale for maintaining a progressive tax system
is clear, the document does not fully address the unique challenges
faced by first-time buyers in Wales. Increasing the LTT zero-rate
threshold to £225,000 was a positive step, but it does not
reflect the rapid rise in property prices in many areas.
Addressing the Issues
The Welsh Government notes that around 60% of transactions,
including most first-time buyers, are tax-free under the current
threshold. However, many first-time buyers are still priced out of
the market, especially in higher-priced areas.
Further Questions
- Regional Disparities: How does the Welsh Government plan to support
first-time buyers in regions where property prices exceed
£225,000?
- Long-Term Strategy: Is there a strategy to periodically review and
adjust LTT thresholds to match market conditions?
- Impact Analysis: Has the impact of the current LTT structure on
first-time buyers compared to those in England and Northern Ireland
been analysed?
- Percentage
of First-Time Buyers:
What exact percentage of the transactions under the £225,000
threshold are first-time buyers? You mention most of the 60% are
first-time buyers, but knowing the exact figures would help
quantify the impact.
Additional Points
- Economic Disparities: Wales is the poorest country in the UK,
exacerbating the challenges for first-time buyers. The current LTT
structure does not adequately address this disparity.
- Local Economic Impact: Savings on LTT could be used by first-time
buyers for home improvements instead, supporting local tradespeople
and boosting the local economy.
- Challenges in Expensive Areas: Why should those growing up in more
expensive areas be penalised by a generalised tax scheme? This
proposed change would provide crucial one-time help, enabling these
individuals to remain within their communities.
- Comparative Analysis: The SDLT relief in England and Northern Ireland
for first-time buyers purchasing properties up to £425,000
significantly aids their ability to afford homes, even in
higher-priced areas. Adopting a similar relief in Wales, adjusted
for local market conditions, would provide equitable support for
first-time buyers.
- Economic and Social Benefits: Increasing the LTT threshold for
first-time buyers could have positive economic and social impacts,
such as reducing the rental market pressure, increasing home
ownership rates, and enhancing community stability.
- Progressive Yet Supportive: While progressive taxation is important,
ensuring that first-time buyers receive adequate support can be
balanced within a progressive framework by setting appropriate
limits that reflect the realities of the Welsh property
market.
Conclusion
While I understand the principles behind the current LTT, the
unique challenges faced by first-time buyers in Wales necessitate a
review. Aligning LTT relief with SDLT relief in England and
Northern Ireland, adjusted for Welsh market conditions, would
provide significant support to first-time buyers and have positive
economic and social impacts.
Thank you for considering my views. I look forward to the
upcoming debate and hope for a constructive discussion that leads
to meaningful support for first-time buyers in Wales.
Sincerely,
Taylor Reynish