Welsh government's "radical" stamp duty reform plans

It is, according to the Welsh first minister, "a poorly designed tax which distorts the housing market", causing problems for homebuyers and builders alike.

Carwyn Jones was talking about stamp duty land tax, a tax he hopes his Welsh government will gain responsibility for in the next transfer of powers from Westminster. Mr Jones wants to make the tax "simpler, fairer and more efficient".

The UK government announced last week that it will consult industry - on both sides of the Wales/England border - about whether the tax should be devolved. Mr Jones has urged ministers in Westminster to get a move on: "Swift and positive action from the UK government will enable us to put our plans for reform into practice."

So what are those plans for reform? That's a question I put to the Welsh government while preparing a short item for Radio 4's You and Yours programme yesterday.

If the Welsh government does have plans for the tax, either it does not want to share them with voters yet or they are very vague. I was directed to a quote from Finance Minister Jane Hutt, who met the construction industry in March.

She said then: "There is a real opportunity to make a difference to the Welsh economy through this tax, and I want to make sure that everyone's views are taken on board.

"I am currently developing the Welsh Treasury and I know that the future of stamp duty will be an important component of its future work."

So what will this mean? The first minister has said that he wants to help first-time buyers who currently face a one per cent levy on homes costing more than £125,000 (the average home in Wales sold for £150,808 between January and March this year).

So beyond raising that £125,000 threshold (and presumably increasing it for more expensive homes to balance the books) what could they do?

In Scotland, from April 2015 a new land and buildings transaction tax will replace stamp duty. The £125,000 threshold will rise to £180,000. Those buying homes costing less than £300,000 will pay less than under the current system; those paying more than £300,000 will pay more.

There may be some ideas there for the embryonic "Welsh Treasury" to look at, but the biggest significance of the devolution of stamp duty could well be the way that the tax and the income stream it generates unlock powers to enable the Welsh government to borrow the cash to finance large schemes such as the long-mooted M4 relief road.