The first Wales-only tax in 800 years is due to be introduced today.
Due to new financial devolution powers Stamp Duty Land Tax will cease to apply in Wales from April 2018, and today the Welsh Government is due to introduce its replacement – dubbed the Land Transaction Tax and Anti-Avoidance of Devolved Taxes (Wales) Bill.
Similar to existing stamp duty, the new tax will be payable on the purchase or lease of a building or land in Wales over a certain price, with rates and bands to be determined at a date to be confirmed.
The new tax presented in the bill, which is the largest ever presented by the Welsh Government at 220 pages, is largely similar to stamp duty, with a few changes including, new anti-avoidance rules, an exemption from the tax for rent elements of new residential leases and changes to a number of other relief rules to be more relevant to Wales.
The Welsh Government’s finance secretary Mark Drakeford called the new bill “an historic milestone in the devolution of tax powers to Wales”.
“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,” he said.
“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 business tell us they need and providing a smooth transaction for home buyers and the property market.”
The bill is expected to get Royal Assent in spring next year.
A Welsh Revenue Authority is to be will be set up to collect Wales-only taxes, while HMRC will continue to collect UK-wide rates such as income tax.
In the 2014-2015 financial year £170m was raised from stamp duty land tax in Wales, with this figure expected to rise to £244m by 2018-19.
The Welsh Government is due to introduce another new tax, the Landfill Disposals Tax (Wales) Bill, later this year.