Second homeowners in Wales face a 1 per cent increase in land transaction tax in the government’s draft budget for 2021 to 2022.

This means a 4 per cent surcharge for second homes worth up to £180,000, increasing to 16 per cent for properties worth £1.6m.

The Welsh government is also planning to raise the threshold at which businesses purchasing non-residential properties are exempt from LTT by 50 per cent to £225,000.

It is hoped that these actions will raise £13m, which the government says it plans to invest in social housing priorities.

Finance Minister Rebecca Evans says: “This budget is designed to protect health and our economy, build a greener future and create change for a more prosperous, more equal, and a greener Wales.

“Despite the most challenging circumstances we have ever faced as a government, I am proud to announce a budget that delivers on our values and provides sound foundations for the next administration.”

Phoebus Software sales and marketing director Richard Pike comments: “The news from the draft Welsh budget today will no doubt have the market looking to the UK government for an idea on what may happen when the SDLT holiday period finishes.

“There are two questions that need to be answered. First, what happens to any mortgages that are in the pipeline on 31 March?  Second, with the country still paying the price of Covid-19 and the uncertainty that it has caused to personal finances, can the government actually afford to go ahead with the deadline?

“There is an argument that asks whether, while the market is moving and putting back into the economy, can they take the risk that end of the holiday won’t put the brakes on again?

“The murmurings are that there will be no extension, but perhaps an increase in second home surcharges and an increase for high value properties may be the better option?”