Land and Buildings Transaction Tax (Amendment) (Scotland) Bill - Call for Evidence


Draft Budget 2016-17 proposes to levy “ a Land and Buildings Transaction Tax (LBTT) supplement on purchases of additional residential properties, such as buy-to-let properties and second homes.” The supplement will be set at three percentage points of the total price of the property for all relevant transactions above £40,000.

The supplement is expected to come into effect from 1 April 2016. The Government estimates that it will raise between £17 million and £29 million in 2016-17.

The Draft Budget acknowledges that the levy will introduce a tax charge for additional properties below the LBTT tax threshold of £145,000. This, it states, “targets the lower end of the market, where demand for properties for investment purposes or second homes could make it difficult for new entrants to the market to purchase a main residence.”

The existing LBTT rates along with those for the proposed additional homes supplement are reproduced below.

Legislation to introduce the supplement is expected to be published around the end of January. The Finance Committee is expected to be lead committee for consideration of the legislation.

Call for Evidence

The Committee would welcome views on—

1. The Scottish Government’s overall policy objectives in introducing the supplement and, in particular, whether it—

  • Is likely to “complement the Government’s commitment to supporting home ownership in a balanced and sustainable way.”
  • “helps to ensure that the tax charge is proportionate to the taxpayer’s ability to pay.”

2. The proposed 3% rate for the supplement and the £40,000 purchase price at which it is proposed to take effect.

3. The Scottish Government’s estimate that the measure will raise between £17 million and £29 million in 2016-17.

4. Any reliefs or exemptions that you consider should form part of the legislation.

5. The potential for tax avoidance under the supplement and how this should be addressed.

6. The likely impact of forestalling.

7. Any other comments you may have on the proposed supplement.

How to submit your evidence
The closing date for responses is Friday 29 January 2016.

All responses should be sent electronically (in Word format – no confirmatory hard copy required) to Written responses will be handled in accordance with the Parliament’s policy for handling written evidence received in response to calls for evidence. All written evidence received may be published by the Parliament and will be treated as a public document. If you wish to submit evidence in confidence or anonymously please read the policy at the link above.  
What happens next?
The Committee will be considering those witnesses it wishes to hear oral evidence from in due course, informed by the written evidence received. Oral evidence sessions are likely to be in February.
Should you require alternative formats of this information or further assistance in making a written submission to the Committee, please do not hesitate to contact the clerking team of the Committee via the email address above or by telephone on 0131 348 5451.