5. Will the Minister make a statement on the Welsh Government's assessment of the effect of the higher 6 per cent land transaction tax rate in respect of commercial property? OAQ54112

The first annual statistics for land transaction tax, covering 2018-19, will be published tomorrow. However, provisional outturn figures indicate that LTT non-residential revenues, amounting to £72 million, were higher than in four of the previous five years of stamp duty land tax. We will continue to monitor the impact of all Welsh taxes.

Gosh. Well, I shall try and contain my excitement in looking forward to seeing these numbers tomorrow—thank you for letting us know that. What I will ask, though, is: the Minister or her predecessor has increased the rate for properties over £1 million in the commercial sector from 5 per cent to 6 per cent, and that sort of increase of a fifth will not lead to higher revenues if the base of transactions falls by a similar amount or more. And I've been concerned that, at least in the early quarterly data, there is evidence that that has happened. Could I ask, going forward—and there will be interaction with the Office for Budget Responsibility around what the forecasts are going to be, as we discussed earlier—will Welsh Government, in the interests of transparency and accountability, publish what the forecast tax take is for each of the bands for both residential and non-residential LTT?

Well, as I say, we will have the outturn data tomorrow, which we can look at in terms of the first year, and we always seek to publish as much information as we can, as we turn to our budget setting, so that we're able to have that scrutiny in committee as we undertake the budget-setting work.

I will say, though, that I know the Member has been particularly concerned about the higher rate of non-residential property transactions, but a lot of the data that is reported by industry analysts, so property investments, which are often share transactions rather than land transactions, and they're not liable for land transaction tax or stamp duty land tax. And so, the tax will have no effect on those transactions. So, any attempt to compare those two particular items aren't possible.

I will say that there are other reasons why companies will seek to base their businesses in Wales, and it's not all about the level of tax rates that we have. There will be access to a skilled workforce and the price of land, for example, is an important consideration when properties for non-residential purposes are bought. So, there are a wide range of factors in this, but obviously we'll continue to monitor the situation closely.

I urge you, Minister, to look at the situation in Scotland, because companies there making similar sized purchases to the ones in Wales will be paying 4.5 per cent—that's below the English rate and, obviously, 1.5 per cent below ours. The month they made that decision, they saw their revenue increase by an amount that was highest on record, and their yearly rise so far stands at something over £13 million. So, I think there's a real lesson here about the level that is optimum for these taxation rates.

Yes. And we will always seek to achieve the optimum level. I know in Scotland, when land and buildings transaction tax was first introduced in 2015, it had a higher non-residential top rate of 4.5 per cent, as David Melding said, and that was a higher rate than the previous stamp duty land tax at the time, but tax revenues in Scotland then increased. The following year, the UK Government increased the top rate of SDLT to 5 per cent, and tax revenues in Scotland then decreased, despite having a relatively lower rate there. In December, the Scottish Government announced it will be increasing its top rate to 5 per cent, which is forecast to increase tax revenues. So, I think it is important to look at what's happening in our neighbouring nations, but always to take the decisions that are best for us in Wales.