Wales moves to replace stamp duty with new land transaction tax

The first new Welsh tax for almost 800 years is to be outlined in a bill expected to be introduced on Monday.

The land transaction tax would replace stamp duty land tax from April 2018 if the bill becomes law.

Like stamp duty land tax, land transaction tax would be payable on the purchase or lease of a building or land in Wales over a certain price.

An announcement about the rates and bands for the proposed land transaction tax will be made closer to spring 2018, taking into account economic conditions at the time.

The bill will also include measures to tackle tax avoidance, based on lessons learned in Scotland, which has a different system to the UK.

The finance secretary, Mark Drakeford, said: “This is an historic milestone in the devolution of tax powers to Wales. This bill marks another step towards the creation of taxes which are more suited to the needs of Wales and support Welsh public services.

“This is a tax which affects so many of us. By replacing stamp duty land tax with a new made-in-Wales land transaction tax, public services in Wales will continue to benefit from the revenues raised by this important tax.

“We have consulted widely about how this tax should work for Wales and listened to a range of views. This is why it will broadly mirror stamp duty land tax, providing the consistency and stability businesses tell us they need and providing a smooth transaction for home-buyers and the property market. We have also been able to learn from the devolution of the tax to Scotland.”

In 2014-15, £170m was raised from stamp duty land tax in Wales, with 55,000 transactions taking place. This is expected to rise to £244m by 2018-19.

Changes to landfill tax in Wales are also due to take place and it is possible that eventually a separate rate of income tax could be set in Wales.

Wales has not had control of its tax system since the 13th century when Edward I invaded Wales.