The Welsh government has announced that stamp duty on the purchase of Welsh commercial property worth £1m and over will be raised from 1% to 6%. This is due to come into effect in April 2018.
A group of chartered surveyors based in Wales has claimed that the increases will result in many property investors ceasing to invest in the nation. A spokesperson for many Welsh chartered surveyors, David Mullins, was quoted in an October 2017 WalesOnline.co.uk article as saying:
“This is a crazy move which makes commercial investment/development in Wales more expensive and it will definitely have an impact on the flow of investment and capital into Wales. It is basically encouraging investors/developers to ignore Wales as an investment/development option and keep their investment monies on the other side of the bridge.”
He said that investors in Wales already suffer from planning decisions taking a long time and they cannot charge high rents. He suggested that rather than increase stamp duty it should be reduced to encourage investors.
About 5% of nonresidential property transactions in Wales are over £1m. The Welsh government said that the majority of investors will pay the same or less stamp duty than present levels. Commercial property investment in Wales represents just 1% of the total investment deals in the UK.
Landlords using commercial mortgages to purchase buy-to-let property in Wales should be unaffected by the changes as long as the properties they buy cost less than £1m.