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'Progressive' Welsh tax rates and £15bn budget announced Welsh budget: Tax cut on average home sale
(35 minutes later)
People buying homes of up to £400,000 will pay the same or less tax on the sale, Finance Secretary Mark Drakeford has announced in his budget statement. Home sales up to £150,000 will be tax free next year, under the new Welsh version of stamp duty revealed by the Welsh Government in its budget.
Welsh ministers will control land transaction tax (LTT), which replaces stamp duty in Wales, from April 2018. There will be higher rates for house sales above £400,000.
Home sales up to £150,000 will be tax free but there will be higher rates above £400,000 in a "progressive approach", Mr Drakeford said. Finance Secretary Mark Drakeford said people buying homes up to that level will pay the same or less tax under the tax, which comes into force.
The budget also includes more than £400m more for the NHS over two years. The cut will mean a saving of almost £500 on the average house sale.
But the figure is lower than the amount experts predict the service needs to keep up rising costs. Mr Drakeford made the announcement as he set out the Welsh Government budget for 2018-19.
Mr Drakeford said the £15bn budget was put together "under the shadow of further cuts to come," from the UK government. Under the existing stamp duty system the lower threshold is £125,000 - but this will now rise by £25,000 under the new Welsh land transaction tax (LTT).
The new LTT rates will be:
The new rates for Land Transaction Tax will be:
Despite taking over some tax powers, the vast majority of the Welsh Government's budget comes in the form of a grant from the Treasury.Despite taking over some tax powers, the vast majority of the Welsh Government's budget comes in the form of a grant from the Treasury.
Tuesday's budget also includes £340m towards for a scheme to build 20,000 new homes, and £50m for a new railway station in Llanwern, Newport. The total Welsh Government budget - with infrastructure and day to day spending combined - has increased slightly, from £15.05bn to £15.3bn.
The NHS will get an extra £230m in 2018-19, which officials said represented an increase of around 1% in real terms. The NHS will get an extra £230m in 2018-19, which officials said represented an increase of around 1% in real terms, and £220m in 2019-20.
However, the figure is lower than the amount experts predict the service needs to keep up rising costs.
Councils will see a cut of between 1.5% and 2% in their funding - slightly worse than the settlement they had last year.Councils will see a cut of between 1.5% and 2% in their funding - slightly worse than the settlement they had last year.
Capital spending will include £340m towards for a scheme to build 20,000 new homes, and £50m for a new railway station in Llanwern, Newport.
A recent report by think tanks based at Cardiff University warned how commitments to protect the NHS, social services and schools had put other unprotected services under more pressure.A recent report by think tanks based at Cardiff University warned how commitments to protect the NHS, social services and schools had put other unprotected services under more pressure.
As well as varying taxes, the Welsh Government can now also borrow money. Mr Drakeford told AMs: "We have worked hard to protect our valued public services from the worst effects of austerity, and this year is no exception.
"Our spending plans, together with our progressive tax plans, demonstrate our commitment to Taking Wales Forward and delivering prosperity for all during these difficult times."
Over the weekend, the Labour-run administration confirmed a two-year deal with Plaid Cymru, covering £210m of spending commitments.Over the weekend, the Labour-run administration confirmed a two-year deal with Plaid Cymru, covering £210m of spending commitments.
Plaid Cymru will abstain on budget votes, ensuring they will clear the Senedd.Plaid Cymru will abstain on budget votes, ensuring they will clear the Senedd.
"We have worked hard to protect our valued public services from the worst effects of austerity, and this year is no exception," said Mr Drakeford.
"Our spending plans, together with our progressive tax plans, demonstrate our commitment to Taking Wales Forward and delivering prosperity for all during these difficult times."
The Welsh Conservatives said the deal was a "missed opportunity to tackle deep-seated issues like NHS underfunding".The Welsh Conservatives said the deal was a "missed opportunity to tackle deep-seated issues like NHS underfunding".
Finance spokesman Nick Ramsay, said: "This is the latest in a long line of sadly predictable backroom deals between the nationalists and the Labour Party, and further evidence that a vote for Plaid is a vote for Labour. Finance spokesman Nick Ramsay said: "This is the latest in a long line of sadly predictable backroom deals between the nationalists and the Labour Party, and further evidence that a vote for Plaid is a vote for Labour.
"Both parties have broken a number of election pledges to make this happen, and the budget makes no mention of Labour's famous commitments on public sector pay or tuition fees."Both parties have broken a number of election pledges to make this happen, and the budget makes no mention of Labour's famous commitments on public sector pay or tuition fees.
"After 18 years of failed budgets, today's offering is a missed opportunity to tackle deep seated issues and take the difficult decisions necessary to improve living standards in Wales.""After 18 years of failed budgets, today's offering is a missed opportunity to tackle deep seated issues and take the difficult decisions necessary to improve living standards in Wales."
Plaid Cymru finance spokesman Adam Price said his party had secured a deal that would "deliver benefits to communities in every part of Wales", but added: "This is Labour's budget and it will have to answer to the people of Wales as to why it is failing to deliver on its manifesto commitments such as lifting the pay cap and stopping the rise in tuition fees."Plaid Cymru finance spokesman Adam Price said his party had secured a deal that would "deliver benefits to communities in every part of Wales", but added: "This is Labour's budget and it will have to answer to the people of Wales as to why it is failing to deliver on its manifesto commitments such as lifting the pay cap and stopping the rise in tuition fees."
He claimed such omissions had "made the void between Plaid Cymru and Labour more and more apparent and has made future co-operation between the parties more and more unlikely".He claimed such omissions had "made the void between Plaid Cymru and Labour more and more apparent and has made future co-operation between the parties more and more unlikely".