Homebuyers in Wales could soon be paying a different rate of stamp duty to those in other parts of the UK, when tax raising powers are devolved from parliament to Cardiff Bay.
A consultation will be launched later on a proposed new tax to replace stamp duty.
The war of words continues between the Conservatives and Labour over the former's pledge to abolish stamp duty on homes up to the value of £250,000. Click here to catch up on the story so far.
Following Labour's 'more bull than beef' jibe, the Welsh Conservatives have hit back by saying:
Not surprisingly, Welsh Labour has seized on the Treasury's refusal to cut stamp duty to attack the Welsh Conservatives. You can read what the Treasury said by clicking here.
It's important to note that what the Treasury rejected was the idea of a UK-wide cut to the tax before 2015 whereas the Welsh Tories' pledge is to abolish it for houses up to the value of £250,000 in Wales once control is transferred to the Welsh Government. Read more about their proposals here.
But this is politics and if the original pledge is all about sending a low-tax, aspirational message to voters, the response is equally about portraying the Welsh Conservatives negatively. Here's what Labour AM Ann Jones says:
The Treasury has rejected calls to cut stamp duty, saying it would be too expensive. It follows a pledge by the Welsh Conservatives to abolish the tax on properties in Wales valued up to £250,000 when control over the tax is transferred to the Welsh Government.
In response to that pledge, Welsh Government sources had challenged the Conservatives to use their influence with colleagues in Westminster to introduce the change immediately rather than wait for it to be devolved.
Now the Treasury has responded to that challenge with a clear refusal.
The Welsh Government has criticised the Conservatives for their pledge to cut stamp duty on houses costing up to £250,000. Click here for details of the Tory proposal.
A spokesperson for the Finance Minister said:
Welsh Conservative leader Andrew RT Davies says his party's proposal to abolish stamp duty in Wales for houses below £250,00 would help ordinary families. He denied that it would only help better-off homebuyers.
A lot will have to change before the Welsh Conservatives' latest pledge to cut a tax could become a reality. The Welsh Government doesn't yet have control over stamp duty but it is expected to get that power as a result of the UK Government's draft Wales bill which is being considered by MPs.
It also won't be news to the Tories that they're unlikely to form a Welsh Government after 2016 so why make this promise? It's all about sending a message to voters: that they have ideas about how to use expected new powers to deliver lower taxes and to encourage aspiration and entrepreneurship.
They'll be accused of favouring wealthier voters but they believe the message will resonate with 'strivers' who don't count themselves as well-off. That was the reason for previous pledge to cut the 40% tax rate. However, they'll hope this call won't lead to the sort of internal row that one has.
Welsh Conservative Leader Andrew RT Davies says abolishing stamp duty for people buying houses worth up to £250,000 would 'send a message to the strivers' that 'they can be better off in Wales.'
In an article due to be published in the Daily Mail tomorrow, he's expected to say that cutting the tax 'could begin to reverse' a 'brain drain.'
The Welsh Conservatives say they'd help homebuyers by abolishing stamp duty on houses in Wales costing up to £250,000. Currently if you buy a house costing between £125,000 and £250,000 you pay 1% of that value in stamp duty land tax. The Tories say that costs the average homebuyer around £1,600.
At the moment people pay the same rates of the tax across the UK but control is expected to be transferred to the Welsh Government within the next few years as a result of the UK Government's draft Wales Bill which is being discussed by MPs.
Scrapping stamp duty would cost a future Welsh Government between £18-20m a year but would boost the economy as well as helping homebuyers. In an article due to be published by the Daily Mail tomorrow, Welsh Conservative Leader Andrew RT Davies says,
The Chancellor is expected to announce that he'll ask businesses their views on transferring power over stamp duty to Wales. The transfer is one of the recommendations of the Silk Commission but the UK Government's response to its report has been delayed until the autumn.
It's thought part of the reason for the delay is a difference of views within the coalition government about the effect on the housing market of devolving stamp duty. A written ministerial statement from the Chancellor later is expected to launch a consultation ahead of the full response to Silk.