Wales could get vacant land tax powers in 2019
WALES could have powers over a proposed new vacant land tax next year, according to Finance Secretary Mark Drakeford.
A vacant land tax was chosen from a shortlist of four tax ideas to test the Wales Act 2014, following a public debate about new tax ideas last year.
Mr Drakeford said any land tax could be used to discourage land banking and encourage the more timely development of vacant sites to meet increasing housing demands in Wales.
Addressing an audience of policy-makers, business people, and other stakeholders at a Cardiff Business School Breakfast event yesterday, he said:
“We are currently working on the process of transferring powers from the UK government to Wales.
“We hope to begin negotiations with HM Treasury in the coming months, with a view to securing the powers in the new year. After this time, we can begin more formal policy development.
“I am committed to ensuring our tax policy is developed in an open and transparent matter and that’s why we’ve had – and are continuing to have – constructive discussions with stakeholders.
“Only through this co-operation can we ensure we achieve our objectives without placing any unnecessary burden on responsible developers and land owners.”
The Welsh Government could potentially be taxed itself as it owns a significant amount of vacant land.
A spokesman for the Welsh Government said: “In Wales the purpose of the tax would be to incentivise land development, so we will look openly at how best to apply the tax to deliver this, including in relation to the public sector.
“In the Republic of Ireland, the vacant sites levy is applied regardless of ownership.
“Local authorities and public bodies are liable for the charge if the criteria for a vacant site are met.”
It comes as the Welsh Revenue Authority (WRA) has celebrated its first annivesary.
The WRA was established in October 2017, six months ahead of the introduction of the first two devolved Welsh taxes in 800 years – land transaction tax (LTT) and landfill disposals tax (LDT)
Mr Drakeford said: “The WRA plays a key role in our ambition to develop a tax system which meets the unique needs of Wales. I am pleased with the work which has been done to get us to this point.”
Dyfed Alsop, chief executive of the WRA, said: “This is a major milestone for the WRA and is testament to all the support we’ve received from all our partners.
“We’re committed to delivering a fair tax system for Wales, which will help raise important revenue to support public services across Welsh communities.”