There are better ways to deliver affordable housing than taxing purchase of second homes and holiday rentals, according to the Institute of Chartered Accountants in England and Wales.
Responding to the Welsh Government’s December 2021 consultation on local variation to land transaction tax rates, the accountants said they supported the idea behind the proposal – provision of affordable homes for people who live and work locally. But they were against any further increase in the rate of LTT for second homes and holiday lets. ‘Such properties are already subject to a 4 per cent LTT surcharge and there is concern that this additional tax would increase prices for holidays in the affected areas, thereby damaging the Welsh tourist industry and the local community which relies on tourism’.
In addition, a system of charging what would effectively be local rates of LTT in addition to the existing national rates would add considerable administrative complexity to the tax system ‘and runs against many of the principles of good tax policy’, said the accountants.
