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As members of the committee have recognised, the private rented sector plays an important role in providing flexibility for many people. However, we also recognise that there are many people who are renting who would far prefer to be able to own their own property. That is what the policy is designed to support.

No.

Good morning. The Land and Buildings Transaction Tax (additional amount: transactions relating to second homes etc) (Scotland) Amendment Order 2022 provides for the increase in the land and buildings transaction tax additional dwelling supplement rate that was set out in the Scottish budget on 15 December 2022. The order increases the rate of the ADS from 4 per cent to 6 per cent. The change is intended to protect opportunities for first-time buyers and home movers by further helping them to compete with buy-to-let investors and second-home owners.

In addition, the change is forecast to raise much-needed revenue at a time when public finances are under significant pressure. The Scottish Fiscal Commission estimates that it will raise an additional £34 million in 2023-24.

As members will be aware, the legislation provided for the rate increase to take effect on the day after the Scottish budget statement, 16 December 2022. That near-immediate change was intended to prevent the possibility of forestalling, which would have both reduced its revenue impact in the next financial year and run counter to the policy intent. The near-immediate introduction was also intended to provide certainty for taxpayers, while acknowledging that the legislation must be approved by the Scottish Parliament in order to remain in force. As with previous rate changes, the instrument includes a transitional provision so that anyone who entered into a transaction prior to 16 December will not pay the increased rate.

I welcome the evidence that a range of organisations have submitted in response to the committee’s call for evidence, and I look forward to members’ questions.

I cannot comment on the decision that any individual landlord will take. It is also important to recognise that the ADS applies not only to the private rented sector, but to second homes and holiday homes as well. The clear policy intent behind it is to support first-time buyers and to raise much-needed revenue. As I set out in my opening remarks, the ADS will raise additional revenue; it is forecast to raise £165 million in the coming financial year, and £34 million of that is additional because of the changes that we are making.

That is the context in which we take these decisions. A broader context, too—not least, the prevailing economic conditions—will impact on the decisions that people who operate via the rented sector will take. As I have said, we take a balanced approach to our taxation policy, and a clear policy intent, which underlies the decisions that we take on the ADS, has been in place for a significant period.

That policy has been in place for a while, but I am conscious that it has been raised as an issue. That is why we have considered it as part of the review.

That might be a fair point, convener, but the reality is that stamp duty is an England-wide tax that does not have regional variations, just as LBTT is a Scotland-wide tax.

By definition, that is what the policy intends to do.

As I say, the issue came up during the ADS review and we recognise that. The word that Ross Greer used about the sector was “minuscule”, but we will be in a position to set out our response to the ADS review relatively soon.

As I mentioned in my answer to Liz Smith, the review was initiated in the early part of last year. However, given the review’s complexity, and in recognition of many of the issues that were raised as part of it, we are giving careful consideration to it. As I said, we will be providing our response to the review shortly. That will cover a number of issues that have been raised and that I know are of concern to members across parties.

As part of the process of deliberating on public policy, we consider a range of views and opinions from different organisations, which we balance against each other. Particular taxes can have particular impacts on the particular sectors, individuals or organisations that are liable for those taxes; however, the revenues that are raised have an impact on the people who benefit from public services.

Decisions have to be taken in the round. We cannot be in a silo where we just focus on one aspect or implication. The context in which we find ourselves is that there is a cost of living crisis and our public services are facing unprecedented pressure. It is an absolute imperative, and it is our moral responsibility, to ensure that we are properly resourcing our public services. That means taking proportionate, fair and balanced decisions with regard to how we utilise the tax levers that are at our disposal.