Landowners throughout Mid Wales could face paying a hefty tax under plans being considered by the Welsh Government, one of the region’s leading chartered surveyors and estate agents has warned.
The Vacant Land Tax will see any land with planning permission that has not been built on taxed annually based on its market value. Land without planning permission but identified for residential use within a Local Development Plan will also face the proposed tax.
“The Welsh Government is yet to clarify details about the new tax. But we do know it could be in place potentially by early next year,” said Martin Moore of Morris, Marshall and Poole with Norman Lloyd, which has offices throughout Mid Wales and Shropshire.
“A similar tax in Ireland introduced last year initially taxed vacant land at three per cent of its market value. That has now risen to seven per cent. We suspect the Welsh Government is looking at a similar model in Wales and it’ll affect any piece of land with planning permission, whether a small plot for a house or a large-scale housing development.
“This also includes land identified for housing within Local Development Plans, such as the recently approved Powys LDP.”
The Welsh Government is proposing the tax as part of the Wales Act. It can seek tax raising powers through the Act and the Vacant Land Tax is one of several it is considering. It would have to be approved by Parliament at Westminster before the Cardiff-based government can proceed.
“Our advice to anyone with such land is to consider ways of bringing it forward for development or face the annual tax which could be quite significant in some cases. The sale of the land is one possible option for those not wanting to build or develop it themselves,” added Mr Moore.
Finance Minister, Mark Drakeford, has already said he believes the tax will release land for development that is currently “land banked.”
Mr Moore said: “Based on his comments, we know he and the Welsh Government are serious about introducing the tax. We’d suggest any landowner considers the potential cost based on anything between three and seven per cent of the market value of their land.
Morris, Marshall and Poole with Norman Lloyd, which has offices throughout Powys, Ceredigion, Gwynedd and Shropshire, is able to handle land valuations and sales on behalf of landowners. More details can be obtained by telephoning 01686 626160.