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People buying homes for less than £225,000 will pay no tax, Wales’ Finance Minister has announced.

New measures unveiled by Rebecca Evans MS include raising the threshold for paying Land Transaction Tax from its current rate of £180,000.

The change will come into force from October 10.

There will also be an increase in the rate of Land Transaction Tax for homes costing more than £345,000, but the increase will be no more than £550.

The Welsh Government has said the move is intended to ensure the threshold for paying tax reflects the rise in house prices over the last two years.

People buying houses for a cost of between £225,000 and £345,000 will also see a reduction in the tax they pay, up to a maximum of £1,575.

However, there will be no tax reductions provided to those buying second homes in Wales.

As of July 2022, the average house price in Caerphilly County Borough was £186,215. This is lower than the Wales-wide average, which was £219,951.

Making the announcement, Ms Evans said the changes have been “tailored to the unique needs of the housing market in Wales and contributes to our wider vision of a fairer tax system”.

She highlighted the fact 61% of house buyers would not pay tax on their purchase, and said the measures “will get support to people who need it and help with the impact of rising interest rates”.

The minister continued: “We also know that helping people at the lower end of the market will have a particular benefit for first time buyers. We help people buy their first home in a number of different ways, including shared ownership and help to buy schemes, and I am pleased to be able to extend that support through these changes to Land Transaction Tax.”

The measures have been brought forward following changes to stamp duty land tax in England and Northern Ireland, which were announced by the UK Government in last week’s financial statement.

The Welsh Government had considered making the changes in its budget, which will be announced later this year – but said it wanted to make the changes now to give “clarity” to the housing market.