Meeting of the Parliament 23 February 2016
I do, and if there was any lack of clarity about that, I apologise to the member. I absolutely accept that, but there are unintended consequences that we should be alive to, and we should not simply look narrowly at the principle and nothing else.
There are wider questions and there are issues in the bill that need to be addressed. There are areas for exemption that the Scottish Government has said that it will think about further before coming back to the committee at stages 2 and 3. I would like to consider a couple of those areas. There are many more that the committee has spelled out in pages and pages of possible reliefs.
The Scottish Government has a laudable intention of attracting new skilled workers to Scotland. Will any such person who is a home owner abroad and who wants to buy a home here be liable for the additional 3 per cent? If that is the case, I do not think that that sends out the message that the Government wants to send, which is that we would welcome to this country those with the skills that we need. How will ownership abroad be identified and the additional tax be enforced? Alternatively, will Scots who want to buy a second home abroad be liable for 3 per cent of the purchase price? I think that the answer is yes, although that could well be unpopular. However, how would it be checked and enforced? The issue is the practical implementation.
What about women leaving abusive relationships, when, for whatever reason, the woman’s name remains on the ownership of the house that she leaves? Will she be liable for the additional 3 per cent? If a person who is a home owner purchases a half-stake in a flat that is valued at £75,000, will they become liable for 3 per cent of £75,000, liable for 3 per cent of £37,500 or not liable at all? I suggest that there is a complexity that we need to understand, and I wonder whether, in a short period of time, we would not arrive at unintended consequences.
In conclusion, I turn to the revenue that the tax is likely to raise. It is fair to say that the amount raised with residential LBTT is less than expected. So far, we have nine months of outturn data but the modelling of behavioural impacts is critical. The LBTT supplement would have benefited from more assessment but the Scottish Government keeps telling us that there is limited data available. We clearly need more. We want to know the Government’s forecasting methodology. The yield was anticipated to be between £45 million and £70 million, but it has been revised down dramatically to between £17 million and £29 million. If it is simply a tax to generate more income, it is a very inefficient way of doing that.
Perhaps the House of Commons Treasury Committee has got it right and we should proceed with less haste. However, I recognise the dilemma for the Scottish Government, so we will support the general principles of the bill at decision time.
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