New Welsh tax pow­ers mean home-buy­ers will pay less

Caernarfon Herald - - NEWS -

WALES will get its own taxes for the first time in 800 years, after the Gov­ern­ment an­nounced the re­place­ment of stamp duty on house sales.

Welsh Gov­ern­ment fi­nance sec­re­tary Pro­fes­sor Mark Drake­ford has un­veiled the new plans as part of the Welsh bud­get for the next two years that could see peo­ple in Wales pay less for houses.

From April next year, the coun­try will be re­spon­si­ble for rais­ing a pro­por­tion of its own rev­enue from two new taxes – a land trans­ac­tion tax and land­fill dis­pos­als tax – to spend on pub­lic ser­vices.

The land trans­ac­tion tax will re­place stamp duty – the charge peo­ple have to pay when they buy a home as per­cent­age of the house value. In Wales, the amount house-buy­ers pay will be slashed to zero if the prop­erty is worth less than £150,000. At the mo­ment, the zero rate stamp duty is only payable on homes un­der £125k.

All buy­ers of res­i­den­tial prop­er­ties cost­ing up to £400,000 will pay the same or less tax than un­der stamp duty tax, while the av­er­age home­buyer will pay nearly £500 less tax than un­der stamp duty land tax.

Peo­ple buy­ing prop­er­ties worth more than £400,000 will have to pay at least 7.5% duty on the house – un­der stamp duty rules, a sim­i­lar house would only at­tract a charge of 5%. Pro­fes­sor Drake­ford said: “This is a new bud­get for Wales and marks an­other im­por­tant mile­stone in our de­vo­lu­tion jour­ney as we pre­pare to take on new tax and bor­row­ing pow­ers from April.

“Rather than just set­ting out our rev­enue and cap­i­tal spend­ing pri­or­i­ties, this draft bud­get is the first to out­line the de­ci­sions we have taken to raise a pro­por­tion of our own rev­enue to sup­port pub­lic ser­vices.

“Us­ing these new pow­ers, we have been able to in­tro­duce pro­gres­sive and in­no­va­tive tax plans, which will make a real dif­fer­ence to peo­ple’s lives, change be­hav­iours and de­liver im­prove­ments to all our com­mu­ni­ties.”

Wales will have the low­est start­ing rate of tax for the pur­chase of busi­ness premises in the UK.

All busi­nesses buy­ing premises up to the value of £1.1m in Wales will ei­ther pay no tax or up to £1,000 less tax than un­der stamp duty land tax.

The Gov­ern­ment also pub­lished a list of ideas for new taxes to be con­sid­ered for the fu­ture. Each of these will be de­vel­oped fur­ther over the course of this year and one new tax idea will be pro­posed to the UK Gov­ern­ment next year to test the Wales Act pow­ers.

The four short­listed ideas are: A levy to sup­port so­cial care, a va­cant land tax, a dis­pos­able plas­tic tax and a tourism tax.

● Welsh Gov­ern­ment fi­nance min­is­ter Mark Drake­ford said the bud­get an­nounce­ment ‘marks an­other im­por­tant mile­stone in our de­vo­lu­tion jour­ney’

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