New tax powers to incentivise developers to complete stalled sites and build more homes are being held up in Westminster, says finance minister Rebecca Evans.
The vacant land tax was first proposed in 2017 as a way to stop landowners holding on to land identified for development and despite two years of work on the detail the UK Government is still asking for more information.
Ms Evans told the Senedd that the episode shows that the system for devolving taxes is ‘not fit for purpose’ and is calling on the UK Government to revise the process for agreeing devolved tax powers.
She said: ‘We began a national debate in 2017 about how new tax powers could provide opportunities to help us realise our ambitions for Wales. More than four years later those opportunities are still not available to us. The process is not fit for purpose and must be improved.’
‘There is a compelling case for the devolution of vacant land tax, given its alignment with existing devolved powers and relatively narrow scope. Two years of work went into ensuring the UK Government had the information it needed to consider this case. We agreed it was for the Welsh Government to make policy decisions about how any new devolved tax would operate, and for the Senedd to decide whether to pass any new tax into law.
‘Despite this, and despite extensive information already being provided, the UK Government continues to ask for yet more information on the operation of the tax. We worked with the UK Government in good faith but it is not appropriate for it to attempt to determine devolved policy or get involved in matters which are rightly for the Welsh Government and the Senedd.’
The minister has written to the new financial secretary to the Treasury to highlight the importance of making progress with the request for powers for a vacant land tax.
She added: ‘A vacant land tax alone is not the solution to the housing crisis, of course, but could help bring forward timely development. As it stands a landowner holding onto land identified for developments leads to a private gain and a public cost. A vacant land tax would incentivise development and create homes for people.’