The Government plans to consult on whether to give control of stamp duty raised on properties in Wales to the Welsh Government.
Following the report by the Commission on Devolution in Wales, chaired by Paul Silk, a former clerk to the National Assembly for Wales, the Government has decided to consult on the implications for the construction industry and housing market.
In 2010/11, stamp duty revenues in Wales were about £115m, about 2 per cent of the UK total.
Chief secretary to the Treasury Danny Alexander says: “There is a very strong case for devolving fiscal and economic levers to the Welsh Government, but it is right that we fully understand the potential impacts so that we can ensure that the decisions we take are right for Wales and for the UK as a whole.”
The ”Silk commission” was set up in October 2011 to review the present financial and constitutional arrangements in Wales.
It was carried out in two parts: the first, which looked at fiscal powers, including whether to hand control of stamp duty land tax to the Welsh Government; and, the second, to review the powers of the National Assembly for Wales.
The commission reported on the first part in November and recommended that the Welsh Government get control of all aspects of stamp duty to “increase the empowerment of the Welsh Government”.
The second part of the commission’s report will be published in Spring 2014.
Secretary of state for Wales David Jones says: “The recommendations made by the Silk Commission in Part I of its work have extensive implications not only for Wales, but for the whole of the UK, so it is essential that we give full consideration to all of its implications.”
Presently, borrowers purchasing a home under £125,000 are exempt from paying stamp duty. It is then taxed at 1 per cent of the purchase price between £125,001 and £250,000; 3 per cent between £250,001 and £500,000; 4 per cent between £500,001 and £1m; 5 per cent between £1m and £2m and 7 per cent over £2m.