Concerns have been raised that the Welsh government may adopt a more progressive model of property taxation, along the lines of Scotland’s new tax, when powers are devolved to Cardiff in 2018.
A
consultation on land transaction tax, which will replace stamp duty in
Wales, concluded this week, but rates and bands will not be decided
until well after Welsh assembly elections next year.
Stamp duty collected in Wales totalled only £145m in
2013-14, although the Office for Budget Responsibility recently forecast
that this would rise to £231m by 2018-19 — the year when control of the
tax will be devolved.
Although average house prices in Wales — at £170,000,
according to the latest Office of National Statistics figures — are much
lower than the UK average of £267,000, there has been
no proposal to lower the threshold at which tax becomes payable. This
lower limit currently stands at £125,000.
Additional powers for Cardiff were proposed by the Conservative-led government earlier this year.
Combined with the devolution of stamp duty, landfill tax and business
rates, the Welsh assembly would be responsible for raising roughly
one-fifth of its budget.
Plaid Cymru, the nationalist opposition party, wants Wales to have the same taxation powers as Scotland, which is set to gain control of its income tax and bands following last year’s independence referendum.