Scottish Finance Committee endorses NAEA's recommendations

Friday 12 February 2016

The Scottish Parliament’s Finance Committee has published its Stage 1 Report on the Land and Buildings Transaction Tax (Amendment) (Scotland) Bill and recommended two issues to the Scottish Government that were highlighted by NAEA.

The Finance Committee has given its backing to legislation that would levy a supplement on the purchase of additional residential properties. However, the Committee has made a number of recommendations for the Scottish Government to consider.

These include a recommendation that there should be a grace period to allow time for a previous property to be sold. The report also asks if the Scottish Government has considered ring-fencing revenue from the LBTT supplement to support help to buy or other areas of investment in the housing sector.

Importantly, these are two areas which NAEA raised in its written evidence to the Committee in January and during the oral evidence session on 3 February.

READ NAEA’s WRITTEN EVIDENCE

SUMMARY OF NAEA’S ORAL EVIDENCE  

Other recommendations from the Finance Committee include the Scottish Government should monitor the impact of the supplement and carry out a comprehensive review once sufficient data is available.

The Scottish Fiscal Commission should also provide a commentary on the first 6 months of outturn figures for the supplement including an analysis of the impact of forestalling by the end of November 2016.

The Land and Buildings Transactions Tax (Amendment) (Scotland) Bill introduces a supplement on purchases of additional residential properties in Scotland (such as buy-to-let properties and second homes) over £40,000.

As drafted, the Bill would apply across the board to all relevant purchases above the threshold.  This comes after the Scottish Government announced its intention to introduce a 3% supplement on LBTT as part of its draft Budget for 2016-17, following a similar announcement by the UK Government.

The new LBTT (Amendment) (Scotland) Bill comes into effect on 1 April 2016.