Independent Review of the Land Transaction Tax and Anti-Avoidance of Devolved Taxes (Wales) Act 2017
In 2017, the Welsh Government introduced its own taxation policy for transactions involving the sales and leasing of land and buildings, replacing the UK’s Stamp Duty Land Tax (SDLT). Wales’s new Land Transaction Tax and Anti-avoidance of Devolved Taxes Act 2017 (LTTA) devolved the power to collect and administer Land Transaction Tax to the Welsh Revenue Authority. This follows the Wales Act 2014 which authorised the country to make primary tax legislation for the first time.
As technical and specific as the change may sound, it impacts a substantial share of the Welsh population – all those who aspire to buy homes in the future or plan to sell and buy a different property. Through improving legislation clarity and streamlining administrative processes, the LTTA was designed to increase taxpayers’ voluntary compliance, simplifying their lives and those of tax professionals alongside other benefits.
Alma Economics was commissioned by the Welsh Government to conduct an independent review of the LTTA. We examined the extent to which it has achieved these objectives, including how satisfied key stakeholders were and which areas could be improved in future. Our review extended to 16 specific areas of improvement by policy adaptations, including aspects as varied as layout and language, changes in rules for commercial leases, timing for submitting documents, and first time buyers’ relief.
How did our team investigate the impact of this policy change?
Our team’s methodology consisted of:
A survey of tax practitioners
In-depth interviews with tax professionals. This includes solicitors, accountants, real estate agents, and mortgage advisors as well as professional body representatives and business organisations with experience and interests in Welsh taxation.
A review of the evidence and data on land transactions in comparable jurisdictions in the UK and abroad.
What did we find?
Here are some of the key findings we presented to the Minister for Finance and Local Government:
The LTTA has successfully achieved its objectives across all aspects reviewed. All changes made by the policy remained appropriate. The policy design process was effective in reaching key goals.
The tax implementation was well received by practitioners and boosted taxpayers’ compliance. Clarity and language simplification proved helpful.
Some policy objectives require regular reviews and potential adjustments. However, alterations should be infrequent to avoid disruption. This applies, for instance, to policy goals affected by changes in housing market values.
We’re pleased to have contributed these and other valuable insights, informing future decision-making around Land Transaction Tax.
Read our full report here.