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 throughout the year. However, the real estate market is a seasonal entity. Spring and fall are generally warm months, but in terms of the real estate market they are hot months. If you are reading this and wondering when to put your property on the market, then NOW is a good time in my opinion. Yes, you will see other properties hit the market as well, but this is the time most buyers are seriously looking for their next home.
So what do you need to know about buying and selling homes this Easter? Well, as of April 1, 2018 in Wales, you will no longer pay Stamp Property Tax (SDLT) but instead pay Land Transaction Tax (LTT), which is operated by the Revenue Authority. from Wales. Let’s see what will change;
The changes result in less tax being paid on residential property purchases up to £ 402,000; this is the breakeven point after which more taxes are paid in Wales. Also, as the table shows, the 0% tax rate band in Wales is higher than in England, which means that LTT will not be paid on property purchases in Wales up to £ 180,000. With the median property price in Wales at £ 150,254 this will be good news for most.
In Cardiff, the median property price is £ 194,359, which is below breakeven, which means that again, less LLT will be paid than under the SDLT regime. With most families in Cardiff living in townhouses and terraced houses, and their median prices are £ 184,044 and £ 217,689 respectively, again the changes will be good news.
However, there are two areas where the changes are not so positive. First, in relation to first-time buyers. In last fall’s budget, the government introduced SDLT relief for first-time buyers, resulting in no stamp duty on first-time purchases of up to £ 300,000 and a lower rate of up to £ 500,000. Unfortunately this benefit has not been reciprocated in Wales and there are no additional exemptions for first time buyers. Second, anyone wanting to buy a property over £ 402,000 will pay more tax. Those who want to buy in certain areas of Cardiff, where average house prices are above this figure, will have no choice but to pay more.
If you are buying a second home or investing in a BTL property, you will need to add an additional 3% to the standard rates.
While the changes are positive for many in Wales, could it stifle growth in the Welsh capital? The removal of the Severn Bridge fees, which is imminent, will inevitably attract investment to Cardiff and South Wales. Wales must be careful not to put off investing by making the purchase of a property more attractive on the border with England.
