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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 22 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

Not at all. I have listened carefully and sought to respond to those views in context. I welcome all stakeholders’ views, and the time that they take to share them and their expertise with the Parliament. In the Government, we have to take a balanced set of decisions. The consequence of not taking the decision on the ADS would be less revenue at a time when we are facing significant challenges across the public sector. We have to take decisions in the round, which is the approach that we have taken on LBTT, as with all our tax decisions. They are consistent with the policies, principles and objectives that are set out in our framework for tax.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

The SFC has forecast that we will continue to see significant revenue being raised by the additional dwelling supplement. Activity in the property market from those who are liable to pay the additional dwelling supplement is forecast to take place next year and in successive years. From 2025-26, there is a forecast for growth in the ADS. The decision to increase the tax must be considered in the broader context of the forecast growth in LBTT overall and the forecast growth in the ADS, specifically, over the five-year period.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

It is clear that there will be a number of factors at play; to suggest that the sole factor is a policy decision to increase the ADS from 4 per cent to 6 per cent is not credible. A range of factors impact on the supply of housing and the majority of those, which have the most significant impact, are outwith our collective control.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

I recognise that organisations that represent stakeholders have a primary responsibility to advocate for their stakeholders but, in setting budgets, we in Parliament and the Government have a responsibility to look at matters in the round. Although there is a clear policy intent of supporting first-time buyers, there is also a policy intent of generating revenue. We all recognise the significant challenges that public finances face currently and going forward.

I recognise that it is entirely right for organisations that represent particular sectors and groups to advocate on their behalf, but the Government has to consider things in the round and how policies will impact on all sectors and people in Scotland.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

With regard to any proposals for future changes, we have been undertaking a significant review of the ADS. We will always keep our policies on tax, and more general policies, under review. I am happy to hear suggestions about any changes that should be made. I ask that those proposals be made in a way that is consistent with our framework for tax.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

Ultimately, the SFC has set out its position. The changes that we have made will lead to a net increase of £34 million, once behavioural change is factored in. More broadly, looking at the revenues forecast for the coming years, a number of factors are at play—most obviously, prevailing economic conditions, as we enter an economic slowdown. We have also seen an increase in interest rates, which will naturally impact on demand for properties and, consequently, on the number of transactions that affect forecast revenue. Over the five-year horizon in the SFC’s forecast, we see revenues picking up.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

The policy intent is to allow first-time buyers to compete more effectively. It is axiomatic that a home mover or a first-time buyer will not be subject to the ADS, whereas an investor or someone buying a second home, a holiday home or a buy to let property will be subject to the ADS. In terms of the tax liability, it allows for first-time buyers and home movers to compete more fairly, and it increases parity within the system. That is the policy intent.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

It will be relatively soon. I think that we are in the realm of weeks rather than months.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

I note that, for any home mover who is not subject to the ADS, the nil threshold goes to £145,000. For a first-time buyer, it is up to £175,000. That is where the benefit is conferred.

For clarity, I point out that the rate of the ADS is now 6 per cent. Because of the provisional affirmative procedure, it was effective at 6 per cent from 16 December.

Finance and Public Administration Committee

Subordinate legislation

Meeting date: 17 January 2023

Tom Arthur

I add that the ADS does not apply to properties below £40,000. I also advise that there is an excellent suite of LBTT calculators on the Revenue Scotland website.