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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 22 July 2025
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Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

The result of the division is: For 5, Against 0, Abstentions 2.

Motion agreed to,

That the Finance and Public Administration Committee recommends that the Land and Buildings Transaction Tax (additional amount: transactions relating to second homes etc.) (Scotland) Amendment Order 2022 (SSI 2022/375) be approved.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

Do members have any further comments?

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

I second that. I bought my first flat when I was 21. My children are aged 30, 26 and 24. One still lives at home and two of them rent, because they simply cannot afford the deposit that is required to buy a property, so I sympathise with that viewpoint. That is having huge socioeconomic impacts in Scotland. It affects people’s decisions on when to start a family and all the things that follow on from that.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

What is likely to be the behavioural impact of the measure? You have talked about the importance of the money—an additional £34 million—that will be raised through it. The £34 million is not net; it is following behavioural change. What is your view on the level of that behavioural change and how it will impact this tax in future years?

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

That is in the south-east of England. You will find that, in places such as Preston or Huddersfield, the average is nowhere near those prices.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

It does not lower the price of the house for those people; it just means that their rivals would pay more for the same house.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

Good morning, and welcome to the second meeting in 2023 of the Finance and Public Administration Committee.

The first item on our agenda is an evidence session with the Minister for Public Finance, Planning and Community Wealth, Tom Arthur, on a Scottish statutory instrument. Mr Arthur is joined by Ewan Cameron-Nielsen, who is head of the fully devolved taxes unit at the Scottish Government. I welcome you both to the meeting.

I advise members that I own a flat that I rent out, as per my entry in the register of members’ interests.

I invite Mr Arthur to make a short opening statement.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

It seems to me that, when the legislation was put in place, no thought was given to that anomaly. If there are two RSLs, with one run by a local authority and the other by a housing association, it seems daft that the relief applies to one and not the other. We will move on from that, but others might wish to look at it in more depth.

We have received responses from the Scottish Association of Landlords, the Scottish Property Federation and others. Although the theory behind the proposed increase is, as you said in your opening statement, that it will make more houses available to first-time buyers, the Scottish Association of Landlords said that most of its tenants are not in a position to buy, which is why they are in the private rented sector.

The Scottish Association of Landlords said that the increase will reduce the availability of properties in the sector, because it will act as a deterrent to people investing in the sector. The survey of members that it undertook last month revealed that

“44% of landlords are planning to reduce their portfolio size in the next 5 years”

and that

“around 10% of tenants in Scotland will be evicted in the next 5 years so that landlords can exit the sector by selling their properties with vacant possession.”

If the sector has issues at this time, how will what has been proposed help?

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

Would the Scottish Government consider a couple of areas for which exemptions have been suggested:

“investment in empty and new build properties”

in order to increase the supply of housing stock, and

“properties which are being purchased with a sitting tenant”?

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Kenneth Gibson

Everyone is aware of rising interest rates and prevailing economic conditions, but the issue that is being raised here—the concern that has been expressed from the market—is that the Scottish Government is not working to mitigate that situation but is going in the opposite direction. For example, Savills has said that the accumulation of measures has reduced the supply of rented accommodation in Scotland such that 29 per cent fewer properties are listed for rent in 2022, as compared with 2016. That is the start of a downward slope, for which no incentive seems to be in place to reverse.

The SPF said that, following the measures, the tax on a home priced at £188,000 would be £12,140, whereas it was £8,380 before the rate change was implemented. In England, it would be £5,640, so the tax in Scotland would be more than double that in England, which could discourage investment in new property in Scotland.