Meeting of the Parliament 23 February 2016
Mr McDonald makes a fair point. We do not have empirical evidence, but there is anecdotal evidence, which we got from a number of witnesses. That is one of the reasons why all members of the committee took the view that the Government should commission specific research on the impact of buy-to-let properties and second homes on the property market as a whole. So far, the Government does not seem to be minded to do that, but I encourage it to do so as it progresses the bill.
I welcome a number of the comments that the Deputy First Minister made, particularly those that he made in relation to local authorities and registered social landlords, large-scale investors and changes to the transitional period, all of which were sensible and fair.
In my final minute or so, I want to focus strongly on the concept of the accidental second home owner. The Deputy First Minister is not minded to make changes in that regard at this stage, but he said that the door was not entirely closed. That gives me great satisfaction and I will push hard against that door to ensure that it reopens, because the issue stuck out like a sore thumb. It is a specific objective of the bill not to capture those who simply replace their existing main residence, but it is obvious to me that there is a severe risk that a significant number of people in that category will be captured. If a family that has grown and wants to move to a bigger house to accommodate that purchases a new house first and the sale of their existing home does not take place on the same day, whether because it falls through or simply takes longer to happen, as well as having to get some form of bridging loan, the family would immediately be liable for the 3 per cent surcharge, which could amount to thousands upon thousands of pounds. Even purchases that are currently outwith LBTT entirely because they are below the threshold could be affected. That is a severe risk.
I see that my time is up. I will return to that significant issue, because I think that it is the biggest weakness in the bill, and I genuinely want to work with the Government to get it right at stage 2.