In a historic move, the National Assembly for Wales has passed the bill which will introduce the first new Welsh tax in 800 years, a land transaction tax which will replace stamp duty land tax and will come into effect on 1 April 2018
The tax will be payable on the purchase or lease of a building or land in Wales over a certain price and includes a higher rate on additional residential properties – the higher rate has been payable in Wales through stamp duty land tax since April 2016.
In 2015-16, £153m was raised from stamp duty land tax in Wales, with just under 59,000 transactions taking place. This is expected to rise to £263m by 2018-19.
The Welsh finance secretary will announce the rates and bands for land transaction tax by October 1 and the regulations will be laid after the UK Budget in the autumn.
Finance Secretary Mark Drakeford said the passage of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill marked a significant step in Wales’ devolution journey.
‘We consulted widely in developing the tax and were able to learn from the devolution of the tax to Scotland. While the new tax provides consistency and stability for businesses and provides a smooth transaction for home buyers, we have been able to make a number of improvements to the tax reflecting Welsh needs and priorities,’ Drakeford said.
Land transaction tax is one of two taxes to be devolved to Wales in April 2018 – landfill tax will be replaced with a landfill disposals tax. The Landfill Disposals Tax (Wales) Bill is currently being considered by the National Assembly.
The Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Bill is expected to receive Royal Assent in May 2017.
