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Given that, even with the 19-unit allowance—I will come on to talk about the 29-unit allowance shortly—79 per cent of developers would already be exempt from paying the levy, who in the market is the member targeting her amendment at?

I thank members for lodging the amendments in this group. I start by addressing amendments 30 and 31, in the name of John Mason, which would place a requirement on ministers to introduce reliefs using their regulation-making powers in section 11, including a relief of no less than 50 per cent for units that are created on brownfield land. The Government has already committed to introducing a reduced rate of a maximum of 50 per cent for new residential units that are built on brownfield land, and amendment 31 would deliver a broadly similar effect.

In response to Patrick Harvie, I think that the answer is that both approaches would deliver the same effect. John Mason made the point about giving certainty in the bill at this stage to those who are seeking to develop on brownfield land, in order to encourage such development. The Government is sympathetic to that aim and we are, therefore, minded to support amendments 30 and 31.

With regard to amendments 32 and 44, in the name of Craig Hoy, a viability-based relief would significantly increase the complexity and administrative burden both for taxpayers and for Revenue Scotland, which would have to assess detailed commercial appraisals and make subjective case-by-case judgments of financial viability. That would move the levy away from a clear rules-based tax that applies equitably and fairly across the tax base to a system that would increase uncertainty for taxpayers and deliver inconsistent outcomes, and which would—I have no doubt—clog up the tax system with the number of assessments that would need to be carried out. In that context, it is difficult not to see these amendments as wrecking amendments, so the Government cannot support them.

I understand the aim of amendment 53, in the name of Michelle Thomson, as I did her earlier amendments on exemptions. However, I have already spoken to the operational challenges of ensuring compliance with an exemption for units that are sold to first-time buyers and the significant impact that that would have on the tax base, so I cannot support this amendment. I stress again that I am happy to discuss alternative measures to support first-time buyers.

On Meghan Gallacher’s amendment 33, I note that the very purpose of having the levy-free allowance to begin with is to exempt smaller developers from the charge by way of an annual allowance of tax-free units; I will come on to talk about the threshold in a minute. As such, I am not clear on what Meghan Gallacher’s amendment is seeking to address or what problem it is trying to fix. Given that I have already indicated that more than 79 per cent of developers are exempt under the 19-unit allowance from interacting with the levy at all—and we could be about to increase that—who, exactly, is her amendment targeting support at? I asked her that question earlier and she could not answer.

Amendments 54, 55 and 57 seek to set a minimum levy-free allowance threshold at 29 units. During the stage 1 debate, I set out the Scottish Government’s position that the levy-free allowance would be set at 19 units. That would exempt 19 per cent of new-build sales from the levy and, as I said earlier, remove 79 per cent of developers from any requirement to interact with the levy at all. A 19-unit allowance, combined with all other exemptions in the bill, would leave 53 per cent of the eligible tax base chargeable. I am sympathetic to calls from the industry, such as from Homes for Scotland, for the threshold to be raised to 29 units. It is important to look at the data. A 29-unit allowance would exempt around 23 per cent of new-build sales, which is an increase from 19 per cent. It would also remove 85 per cent of developers from the levy, which is an increase from the 79 per cent that I indicated earlier. A 29-unit allowance, combined with all other exemptions in the bill, would leave 50 per cent of the eligible tax base chargeable.

It is important to recognise that, given that 79 per cent of developers would be excluded under the 19-unit allowance, increasing the threshold to 29 does not, in fact, benefit the vast majority of small and medium-sized businesses. I take on board Michelle Thomson’s point that some of those businesses might have aspirations to grow larger, which we would not want to stand in the way of. However, ironically, the benefit of increasing the threshold to 29 would fall disproportionately on larger developers. It would also have the effect of pushing up the levy per unit, because the tax base would be marginally smaller. There would therefore be a number of counter-implications. However, on balance, we are minded to support the principle of a 29-unit allowance, and the Government will therefore support amendments 54 and 55.

We are not able to support amendment 57 due to the restrictions that it would place on ministers’ ability to tailor the allowance to reflect changing conditions in future. I therefore ask Michelle Thomson not to move amendment 57. Amendment 56, which is also in Michelle Thomson’s name, would allow for the carrying forward of an unused allowance. Although such a provision could increase complexity in the administration of the levy, the Government is content to allow for the power to deliver a carry-forward provision, because we recognise that, on the margin, it could prevent smaller developers from having to behave in a way that would be inefficient in seeking to complete or not complete units in order to meet arbitrary financial year-end dates. We are therefore minded to support that provision.

In response to Michelle Thomson’s remarks on cross-border competitiveness, I note that the reverse is also true. It is worth noting that the levy in England has no provision for any delay in payment—the whole payment is due up front. I look forward to our conversations to explore that issue.

Amendment 7 agreed to.

Section 17, as amended, agreed to.

Section 18 agreed to.

Section 19—Accounting for levy by return and time for payment

Amendment 58 not moved.

Section 19 agreed to.

Sections 20 and 21 agreed to.

After section 21

Amendment 8 moved—[Ivan McKee]—and agreed to.

Sections 22 to 44 agreed to.

Before section 45

Amendment 59 not moved.

Section 45—Report on operation of Act

Amendment 37 not moved.

Amendments 9 and 10 moved—[Ivan McKee]—and agreed to.

Amendment 38 moved—[Liz Smith].

In response to the sector, we have moved the implementation back to April 2028, and we have triggered that on completion, which we think is a better method, because it gives more certainty to the market and supports cash flow. We think that that is a better trigger point. To go back and consider what is happening with building warrant applications would run counter to that.

I think that the proposal that we have put in place gives sufficient visibility. It is a more effective trigger point and it is more helpful for the sector. To be honest, amendments 16 and 19 are just seeking to further delay implementation, which is not helpful, given the need for capital income to support the cladding remediation programme.

Amendments 17 and 18, in the name of John Mason, are linked in their aim to bring temporary accommodation within the scope of the levy. I recognise the view that Mr Mason expressed at stage 1 on the benefits of a contribution from larger hotels. However, the amendment as drafted would bring all temporary accommodation within scope, which would not only subject a wide range of recreational accommodation types to the charge but would bring in other temporary accommodation uses, such as accommodation for persons fleeing homelessness or domestic abuse. For that reason, the Government cannot support these amendments as drafted, but I would be happy to consider whether certain types of temporary accommodation would merit being included in the tax base and to discuss that further with John Mason, and indeed with any other members.

Amendments 48 to 50 all seek to introduce an exemption for properties sold to first-time buyers. As with a number of amendments that have been lodged, these proposed amendments to the bill would be very difficult to deliver. At the point of taxation, a building will not have a use, and any such exemption relies on an intended future use. It is not clear how taxpayers would know, at the point of collection, which units were to be sold to first-time buyers. Therefore, while the intent behind amendments 48 and 49 is well meaning, it might inadvertently create additional pressure on developers to demonstrate eligibility, and so increase administration costs for Revenue Scotland.

The concern is that it would create a perverse incentive in the system for people to seek listed building status for buildings in order to avoid paying the building safety levy. I think that having a more general exemption for conversions would be the right thing to do. It would be better to have a more encompassing policy that applied to all such conversions and was not tied to whether a building was listed.

If I may intervene, the first important point to recognise is that, as I said to Meghan Gallacher, we have already delayed the implementation of the levy by one year, which was important to give the sector space and time. In England, the levy comes into effect in October this year, which is significantly earlier than in Scotland.

As things stand, with the levy set to be implemented in April 2028, we are more than two years away—I think that it will be about three months after that date before any revenue starts to flow into the fund as a consequence of the bill. It is fair to say that any funds that are there already will be well and truly spent on the programme, and a lot more besides, before we even start to see any revenue flowing in in 2028.

Will the member give way?

Those were not my words; if I recall correctly, they were the words of John Mason. I say that just for clarity.

I was just going to make that very point: it was the UK Labour Government that set the target, and we have taken a pro rata percentage of that.

—whether it is their position that the trigger point should be on getting the building warrant or on completion of the property.