One of the most frequently asked questions I am 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 go 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 housing market they are hot. 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’ll see other properties come on the market as well, but this is the time when most buyers are seriously looking for their next home.
So what do 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 Revenue Authority of Wales. Let’s see what’s going to change;
The changes result in less tax being paid on purchases of residential property up to £402,000; this is the “break-even” point after which more tax is paid in Wales. Also, as the table shows, the 0% tax rate band in Wales is higher than in England, meaning no LTT will be paid on purchases of Welsh property up to £180,000. With the average price of a property in Wales at £150,254, this will be welcome news for most.
In Cardiff, the median property price is £194,359, which is below breakeven, meaning again less LLT will be paid than under the SDLT scheme. With the majority of Cardiff families living in terraced and semi-detached houses, and their average prices being £184,044 and £217,689 respectively, the changes will once again be good news.
However, there are two areas where the changes are not so positive. First, in relation to first-time buyers. In last autumn’s budget, the government introduced SDLT relief for first-time buyers, resulting in no stamp duty on first-time purchases up to £300,000 and an even lower rate of up to £300,000. 500,000. Unfortunately this benefit has not been reciprocated in Wales and there are no additional reliefs for first time buyers. Secondly, anyone who wants to buy a property worth more than £402,000 will pay more tax. Those looking 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% on top of the standard fees.
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 postpone investment by making the purchase of a property on the border with England more attractive.