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Wales Only Taxes – Vacant Land Tax: What you need to know
November 5, 2018
You might have heard that there is a proposal to introduce a Vacant Land Tax in Wales. To save you the time of reading the new proposals, we’ve put together this short summary – highlighting the key points.
So, what is Vacant Land Tax?
Essentially, it does what it says on the tin. It would be a tax on vacant areas of land in Wales and it would be relevant to you if your land is ready for development. If your land has the benefit of planning permission but construction hasn’t yet begun, then you could be liable to pay the tax.
Why is it being introduced?
The main reason behind this tax is to combat the perceived practice of ‘land banking’. This is where developers or landowners supposedly buy plots of undeveloped land and do nothing with them for many years – until they see a satisfactory increase in value over time. This practice doesn’t benefit the wider community because development (which could be housing) is completely put on hold.
How much will it be?
The short answer is we don’t know yet. It has been suggested that it will be modelled on a similar tax in the Republic of Ireland, where local authorities keep a register of all land that is suitable for development. Tax is 3% of the land’s market value if it has remained vacant for over a year – rising to 7% after two years.
What happens if you can’t develop the land?
The message seems to be that if you’ve done everything in your power to implement the planning permission and develop the land and if there are genuine reasons why the development cannot happen, then this tax will not apply. Time will tell as to what exactly will trigger the tax and what can be used as genuine reasons for non-development.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
