Scottish Government respond to Finance Committee on LBTT

Tuesday 23 February 2016

Earlier in the year we submitted our response to the Scottish Finance Committee's consultation on LBTT changes.

We're pleased to say that the Finance Committee took on board some of our recommendations and put them to the Scottish Government who have subsequently issued their response. 

Grace period
We recommended that there should be a grace period to allow time for a previous property to be sold. The Scottish Government have in their response to the Finance Committee acknowledged that grace period is a valid concern and "asked Revenue Scotland to monitor the position between the LBTT supplement provisions coming into force and 30 October 2016", saying that they can then take an informed view as to the need or otherwise of a grace period and what that grace period should be. 

Ring-fencing
We argued that: "Regardless of the amount of money raised as a result of the additional homes supplement the NAEA would like to see the money used to build more houses and fund initiatives to help first-time buyers purchase more affordable housing."

The Committee again put this recommendation on ring-fencing to the Scottish Government. And in their lengthy and rather non-committal response the Scottish Government said:

"the housing system should cater for a variety of needs and demands across all tenures. Help to Buy (Scotland) has had a positive impact and has to date supported over 7500 home owners into home ownership. The new scheme will help up to a further 7,500 households over the next 3 years. The Scottish Government has sought to offer support where there is market failure, in this case addressing the lack of availability of higher loan-to-value lending on new-build property.

"The Scottish Government has now changed its maximum contribution from 20% to 15% for the new scheme to reflect improved market conditions. A lower equity stake will ensure that as many people as possible can access support through the scheme, which is also focusing on supporting more affordable property.

"It is important that funds are flexible to meet determined need. The Scottish Government therefore continues to explore innovative ways to deliver more for less public investment, and continues to work creatively with partners. This work will focus particularly on approaches to unlock infrastructure investment and attract private investment."

READ THE COMMITTEE'S THIRD STAGE 1 REPORT

READ THE SCOTTISH GOVERNMENT'S REPLY