WIREDGOV

The question whether there should be an extra charge on the purchase of second homes and buy-to-lets in Wales when stamp duty land tax is devolved in April 2018 will be put to the public over the summer.

A new consultation, launched by Finance Secretary Mark Drakeford yesterday, will gather views until 31 August.

A higher rate of stamp duty land tax is currently charged on the purchase of additional residential properties following its introduction by the UK and Scottish Governments from 1 April this year.

Stamp duty land tax will be replaced in Wales in April 2018 by a new land transaction tax. As it prepares for the devolution of tax powers, the Welsh Government is seeking the views of the public, stakeholders and interested parties about the higher rates of land transaction tax on additional residential properties in Wales, such as second homes and buy-to-lets.   

The Office of Budgetary Responsibility (OBR) has estimated the revenues in Wales from the higher rate on additional residential properties would raise £9m in 2016-17, rising to £14m in 2020-21, which could help to fund public services in Wales.

Launching the consultation, Mark Drakeford said yesterday:  

“From April 2018, Wales will have a new land transaction tax, replacing stamp duty land tax. A great deal of work is already underway to prepare for the devolution of tax powers and we have consulted widely on how a new Welsh land transaction tax will look and work.

“Since the consultation took place, there has been a change to stamp duty land tax charges in the UK and Scotland with higher rates being charged on additional residential properties. That is why we have today published a Welsh Treasury Paper about the higher rates, to gather people’s views about how this might work in Wales when the tax is devolved.

“I am committed to ensuring our tax policy and the wider devolved tax system in Wales is fair, coherent and co-ordinated. I would encourage homebuyers, agents, tax professionals and stakeholders to share their views with us about this important issue.”