Senedd members rubber stamped a £7m increase in the higher rate of land transaction tax.

Mark Drakeford said the rise makes rates in Wales broadly comparable with the equivalent stamp duty land tax in England and Northern Ireland.

He told the Senedd the higher rate, which applies to additional property purchases, rises by one per cent across all bands, creating a five per cent surcharge over the rates payable by other homebuyers.

Wales’ finance secretary stressed no changes have been made to the main residential rates, with higher rates applying to second homes, buy-to-lets and companies buying dwellings.

The regulations came into force on 10 December after being announced as part of the draft budget but Senedd approval was required to make the changes permanent.

Prof Drakeford said transitional arrangements were provided for buyers who exchanged contracts before rates changed but completed their transactions afterwards.

Sam Rowlands, the Conservatives’ shadow finance secretary, opposed the increase, saying people are already taxed to a significant level across Wales.

He told the Senedd: “There are other people also caught up in this particular tax, such as a parent or grandparent perhaps seeking to support their child or grandchild with a purchase of a property if they themselves are already property owners.

“And when we look at the amounts here: while this is a one per cent increase on each of those bands, when we’re looking at average house prices in Wales creeping up to around £250,000 – that particular bracket is now at 10 per cent.”

Prof Drakeford said the number of transactions that the higher rates affect is a “small minority” and “being undertaken by people who have the broadest shoulders.”

Land transaction tax was introduced by the Welsh Government alongside landfill disposals tax in April 2018, becoming the first Wales-only taxes in around 800 years.