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Is the New Land Transaction Tax the Cause of Large House Price Rises in Wales?

The introduction of the Land Transaction Tax (LTT) to replace stamp duty in Wales is showing signs that it has had a significant impact on house prices, according to the latest data that has been published by LSL property services.

Prices, nationally in Wales have increased by an average of 4.8% annually, while prices in Cardiff and Swansea have risen by almost 10% during this same period.

Areas such Monmouthshire, the Vale of Glamorgan and Torfaen have seen rises of over 10% in the past 12 months.

LSL says that these sharp rises in the higher priced property is due to many buyers pushing through purchases before the Land transaction Tax was introduced to avoid paying more tax on these higher valued homes.

A similar situation was seen back in 2016 ahead of when the 3% stamp duty surcharge was introduced on the purchase of second homes and additional properties.

In March data showed that eight of the most expensive local authority areas in Wales set new price peaks. However, according to LSL, these higher levels of prices are likely to been only short lived.

The new Land Transaction Tax in Wales starts at £180,000 compared with stamp duty in England which starts at £125,000, but as seen the higher valued properties can suffer rates of 3%, 7.5% and even 10%.