In the draft budget, published in December, I set out details of our plans for how Welsh devolved and partially devolved taxes are supporting our spending priorities and delivering a fairer and more progressive tax system in Wales. To bring the changes in the draft budget into permanent effect, Senedd approval is needed for three sets of regulations. Two are subject to the made affirmative procedure, and one to the draft affirmative procedure.

The Land Transaction Tax (Tax Bands and Tax Rates) (Wales) (Amendment) Regulations 2020 came into effect on 22 December. The Landfill Disposals Tax (Tax Rates) (Wales) (Amendment) (No. 2) Regulations 2020 will come into force on 1 April 2021. The Land Transaction Tax (Specified Amount of Relevant Rent) (Wales) (Amendment) Regulations 2021 are subject to the draft affirmative procedure and will be made if approved. I'm grateful to the Legislation, Justice and Constitution Committee and the Finance Committee for their reports, and the opportunity to provide evidence to the Finance Committee.

The land transaction tax rates and bands regulations came into effect from 22 December. They made changes to the rates that apply to the higher residential rates that are payable by people who already own an interest in another residential property. They also apply to companies that buy residential property. The rates payable were increased by 1 percentage point for each band, creating an effective 4 percentage point surcharge over the rates payable broadly by home buyers. The additional revenues will fund Welsh Government policy initiatives in 2021, 2022 and beyond, in particular investment in social housing.

I understand the concern expressed over the speed with which these changes were made, especially given that the changes increase the tax liability. However, it was not uncommon for changes to stamp duty land tax to be announced on budget day to come into effect the following day, and there are good reasons for these changes. Firstly, if the tax payable is to increase, a delay in bringing the charge into effect can result in transactions being brought forward in order to make a tax saving. Secondly, if the tax payable is to decrease, then transactions may be delayed to benefit from that tax reduction. Importantly, for transactions liable to the higher residential rates, the regulations contain protections for those taxpayers who have exchanged contracts and where the changes would result in an increased liability. Those taxpayers will be able, in the main, to pay tax based on the rates in force when they exchanged contracts. 

Changes to the tax bands for non-residential transactions were also made. The zero-rate bands for both consideration other than rent and consideration consisting of rent were increased by 50 per cent and mean that transactions with consideration of £225,000 or less will not pay tax. This modest reduction for business demonstrates this Government's support for businesses as they seek to recover from the pandemic, as well as encourage the start-up of smaller enterprises in Wales. 

I recognise the points raised in the committee reports in relation to the absence of one of the relevant powers in the preamble to the regulations. The Welsh Government's response to the committee sets out clearly why we consider the regulations as made to be valid. Case law is supportive of that position, and the primary regulations that are amended include all of the relevant powers in the preamble, and the regulations clearly indicate the changes to be made. 

The second set of land transaction tax regulations relate only to non-residential transactions and amend the amount of relevant rent. The relevant rent amount is an annual rental figure, and if it is paid together with consideration other than rents, an anti-avoidance rule is applied. These regulations increase the amount by 50 per cent, from £9,000 to £13,500. This maintains the relationship between the zero-rate thresholds and the relevant rent amount, ensuring the rule continues to operate as before. 

On landfill disposals tax, the Landfill Disposals Tax (Tax Rates) (Wales) (Amendment) (No. 2) Regulations 2020 relate to setting the 2021-22 tax rates for landfill disposals tax. These regulations set the standard, lower and unauthorised disposal rates for landfill disposals tax, which, subject to the outcome of today's debate, will apply to taxable disposals made on or after 1 April 2021. In accordance with my announcement at the draft budget in December, the standard and lower rates for landfill disposals tax will increase in line with the retail price index. This approach ensures that rates remain consistent with the UK for the next financial year, providing the stability that businesses have told us they need.

This year, by setting the same tax rates as the UK Government, public services in Wales will continue to benefit from tax revenue, while ensuring the risk of movement of waste across the border is reduced. The standard rate will be increased to £96.70, and the lower rate will be £3.10 per tonne. The unauthorised rate, set at 150 per cent of the standard rate to discourage illegal waste activity, will be £145.05 per tonne. I ask Members to approve these regulations.