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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 25 June 2025
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Displaying 1169 contributions

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Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

We recognise that second and holiday homes can play an important part in local economies, but we also recognise that they can present many challenges as well, particularly around population retention and affordability. That is why we have taken this approach and why, through the joint working group that is looking at the resourcing of local government, including in relation to council tax, which was established following the Bute house agreement, we are, in conjunction with COSLA, looking at measures that can enhance local authorities’ ability to respond to such issues, including, for example, through the additional council tax supplement for second homes.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

Your point about the concerns is well made, and I know that those concerns are shared by many people, notwithstanding the positive impacts that holiday lets can have. There is clearly a risk that, if critical mass is reached, it can undermine the density of population that is required to sustain a community.

One of the issues that were much explored during the passage of NPF4 was the applicability of local living and 20-minute neighbourhoods in a rural context. That presents challenges and requires a bespoke response, but those challenges are exacerbated in a situation in which there are vacant properties.

The points are well made and, although it is not a solution in itself, tax policy, whether it be through LBTT or enhancing the powers that are available to local government through council tax, is important in addressing that.

10:15  

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

As the convener and the committee will be aware, we are in the process of carrying out a review of the ADS and will have more to say about it relatively soon. We are carefully considering the consultation responses, and I will have more to say on that specific issue in due course. I am not currently in a position to go into any further detail on what the outcome of the review will be, but that issue has been considered as part of the review.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

We gave that careful consideration as part of a broad review of the ADS that we did last year. It is a complex area, and it is important to get the balance right, but in the near future I intend to bring forward regulations for consultation. Those will respond to a number of the areas that have been raised as part of the review process. It will be a matter for the committee to consider, and I am happy to give further evidence when we are in the position to publish our intentions. We have not finalised our decisions, so I do not want to speculate about what our response will be to the review. However, I assure the committee that we will bring forward those measures quite soon.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

What you have referred to would be specific to the ADS. For home buyers, the threshold is £145,000 and £175,000 for first-time buyers. It is important to take into account the distinction between property prices in Scotland and England, too: as of last October, the average property price in Scotland was, I think, around £195,000, whereas it is £316,000 in England.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

I would also make the point that our devolved system of LBTT has been in place for some time. Following the pandemic, we have seen significant resilience and recovery in the housing market. I appreciate that, as we move into this year, the combination of the economic headwinds that we face in the wake of rising interest rates and the impact of the mini-budget, which has led to the withdrawal of mortgage products, will have an impact.

Looking at the revenue that we are raising, LBTT is a strongly performing tax and it is forecast to provide a net gain, once the BGA is factored in. The decisions that we take are balanced. We make them to support first-time buyers and to raise revenue, and that is what they are doing.

09:45  

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

We are consistent. The policy supports our broader policy on housing in “Housing to 2040”. That is Government policy that is already set out. All our decisions on tax are taken with regard to the wider considerations around Government policy. The approach is consistent and in line with our broader strategic objectives.

With regard to support for the PRS, I ask Ewan Cameron-Nielsen to come in on the exemption for six or more purchases.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

Yes. The policy intent is to support first-time buyers. The example that you gave illustrates the impact that the change would have. Somebody who was buying a second property as buy to let at, to use the example that you gave, £100,000 would be liable for the ADS whereas a first-time buyer or a home mover who is not eligible for the ADS would not be required to pay any LBTT because they are under the threshold. As I said, for first-time buyers, it is up to £175,000.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

We consider our policy decisions in the round. There are several factors that determine the supply and availability of housing. To suggest that the sole factor will be the ADS is simply not credible.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

I am not familiar that the statement that the university issued or the broader context, so I cannot comment on that. However, we are talking about a transactional tax that does not impact on existing properties; it is about future acquisitions. Furthermore, as Ewen Cameron-Nielsen set out earlier, there are provisions in place to support the private rented sector when six or more properties are acquired in a single transaction.