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11 December 2025
A Bill to raise funds towards Scotland’s cladding remediation programme carries “significant risk” to the housing market, says a parliamentary report published today.
Holyrood’s Finance and Public Administration Committee says it is “unconvinced” that the Scottish Government has fully considered the implications of the Bill on the nation’s ‘housing emergency’.
The committee has decided, therefore, to make no recommendation on the general principles of the Bill – a first time for this committee – and says it hopes the government will respond positively to its findings.
The committee is also calling on the government to carry out market ‘sensitivity analysis’ prior to deciding levy rates and reliefs, and to monitor the effect of the new tax on the housing sector.
Finance and Public Administration Committee convener Kenneth Gibson said:
“Our committee understands the Scottish Government’s intent behind this Bill, but we believe the introduction of the levy carries significant risk. We have concerns regarding its potential impact on the housing market, and on the delivery of houses in areas where the viability of building sites is already challenging.
“We are unconvinced that the government has fully considered the implications for its self-declared housing emergency when designing the policy approach for this levy. We also believe the policy design has been focussed on the arbitrary figure that the levy could raise, and not sufficiently focussed on developing a good, well-structured levy that is sustainable.
“On the basis of the evidence received, our committee makes no recommendation on the general principles of the Bill. We trust that the Scottish Government will respond positively to our recommendations to inform further discussion of the general principles during the Stage 1 debate in the chamber in January 2026.”
Calling for regular reports on the housing market impact, Mr Gibson said:
“Our committee recommends that the reporting requirements in the Bill be strengthened, so that the government is required to report every three years on how the levy is working. That report should include an assessment of how the levy is impacting the Scottish housing market in practice.”
‘Sensitivity analysis’; Mr Gibson said
“Our committee does not consider the levy to be fully reflective of the sensitivities of the housing market in Scotland. We therefore recommend the government undertakes a sensitivity analysis, to assess in more detail, the impact of the levy on the housing market - in particular on rural sites and on SME developers.
“The analysis should be published in time to inform the government’s decisions in setting levy rates and, where applicable, any reliefs, through secondary legislation.”
Other findings and recommendations:
Minister Ivan McKee announced in November 2025 that introduction of the levy rates will be pushed back by more than a year to April 2028.
The Stage 1 debate on the Building Safety Levy (Scotland) Bill is expected to be debated by Parliament in the new year.
Read the Building Safety Levy (Scotland) Bill
Minister Ivan McKee announced in November 2025 that introduction of the levy rates will be pushed back by more than a year to April 2028.
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