Land Transaction Tax (LTT) and Multiple Dwellings Relief (MDR)
The higher residential rates of LTT are increasing by 1% across all bands with effect from 11 December 2024, a change which is estimated to raise an additional £7m in 2025-26.
Drakeford stated that draft regulations will be laid in the Senedd in early 2025 to remove MDR from transactions where Subsidiary Dwelling Exemption (SDE) is applied.
Propertymark is disappointed by these decisions, having urged the Welsh Government to review all property taxes and look to reduce the impact on the sector. We will continue to call for an exemption for new long-term rental properties from the 4% Land Transaction Tax levy on additional homes, and encourage Ministers to consider wider access to grants and interest-free loans for private landlords to bring empty properties back into use and to incentivise decarbonisation.
Funding to boost supply
Supporting the mission to end homelessness in Wales, £81 million will be allocated to deliver the long-promised target of 20,000 more homes for social rent. There is also a further £5.5 million for the Independent Living Programme which supports housing adaptations. This is very welcome, although, until social housing supply keeps up with demand, we would like to see the surcharge on additional properties cut to stimulate supply in the private rented sector.
An additional £57 million will be provided for the Help to Buy scheme, and £2 million for private rented homes through the Leasing Scheme for Wales and extending the Green Homes scheme through the Development Bank of Wales.
Local authority funding
We are pleased to see an increase of £253 Million to local government settlement, a like-for-like uplift of 4.3%. Councils in Wales have responsibility for enforcing the Renting Homes (Wales) Act and will gain further duties under the proposed Building Safety Act. This increase in funds must be used for these additional legislative challenges for the housing sector.
