ICAEW’s representation, published as ICAEW REP 28/22,highlights that while ICAEW members support the provision of affordable homes for people who live and work locally, they did not favour a further increase in the rate of land transaction tax (LTT) for second homes and holiday lets as the means to address the problem. Such properties are already subject to a 4% 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.
ICAEW’s Tax Faculty’s response to the Welsh Government’s consultation on introducing local variation to land transaction tax rates in Wales was written in collaboration with ICAEW’s Director for Wales and members in Wales. ICAEW members thought the policy objective of ensuring sufficient availability of affordable housing in Wales would be better achieved through the planning process.
The representation also highlights that 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 set out in the Tax Faculty’s Ten Tenets for a Better Tax System
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