One of the most frequent questions I get asked is “what is the best time of year to sell a property?” There is no right or wrong answer to this question, it is a matter of opinion. Properties come on and off the market all year round. However, the property market is a seasonal entity. Spring and Autumn are generally warm months, but in terms of the property market they are hot. If you are reading this and wondering when to put your property on the market, then in my opinion NOW is a good time. Yes, you will see other properties also coming onto the market, but this is the time most buyers are seriously looking for their next home.
So, what is it that you need to know about buying and selling homes this Easter? Well, from 1st April 2018 in Wales you will no longer pay Stamp Duty Land Tax (SDLT), but instead pay Land Transaction Tax (LTT), which is operated by the Welsh Revenue Authority. Let’s see what is going to change;
The changes result in less tax being paid on residential property purchases up to £402,000 – this is the ‘break-even’ point after which more tax is paid in Wales. Additionally, as the table shows, the 0% tax rate band in Wales is higher than in England, which means that no LTT will be paid on purchases of properties in Wales up to £180,000. With the average price of a property in Wales at £150,254, this will be welcome news to most.
In Cardiff, the average price of a property is £194,359, which is below the break-even point meaning that again, less LLT will be paid than under the SDLT regime. With the majority of families in Cardiff living in terraced and semi-detached homes, and their average prices being £184,044 and £217,689 respectively, again the changes will be welcome news.
However, there are two areas where the changes are not so positive. Firstly, in relation to first time buyers. In the budget last Autumn, the government introduced SDLT relief for first time buyers, resulting in there being no stamp duty payable for first-time purchases up to £300,000 and a further reduced rate up to £500,000. Unfortunately, this perk has not been reciprocated in Wales and there are no additional reliefs for first time buyers. Secondly, anybody wanting to buy a property over £402,000, will pay more tax. Those wanting to buy in certain areas of Cardiff, where average house prices are above this figure, will have no choice but to pay out more.
If you are buying a second home or investing in BTL property, then you will need to add on a further 3% on top of the standard rates.
Whilst the changes are positive for many in Wales, could it stifle growth in the Welsh capital? The removal of the Severn bridge tariffs, which is imminent, will inevitably attract investment into Cardiff and South Wales. Wales needs to be careful not to put off investment by making the purchase of a property more attractive over the border in England.