Hansard

I have to say that it has been a fairly short debate.

I want to return to the issue of the accidental second-home owner, because I genuinely think that that could be a pretty big problem and one that, both south of the border and here, has not been considered enough.

As we heard in the policy memorandum, we deliberately want to exclude from the tax those people who are just replacing their existing main residence. In the scenario where a family is selling their house but the sale does not go through—it can fall through for any reason—or the scenario where the house just takes longer to sell than anticipated, they would be liable to pay a sum of money for LBTT, ranging from a few hundred pounds to potentially tens of thousands of pounds. Of course, that money could ultimately be clawed back, but it would have to be paid in the first instance.

In my view, that process is wrong for a number of reasons. First, it seems to me unduly punitive because not only are people in those scenarios likely to need some form of emergency finance or bridging loan, but they will have the additional stress of an instant bill that has to be paid before the transaction can go ahead. In many cases, that might just take them to the financial brink and result in a transaction not going ahead, which could have implications elsewhere in the housing chain.

Very few transactions take place in a vacuum, unless a first-time buyer is involved. There are quite often chains, as they are called, where a number of transactions rely on another transaction taking place; if one of those falls through because of the tax having to be paid up front, it could take people over the financial brink, which could have a wider impact on the housing market. It strikes me that the process is unduly bureaucratic, particularly when the Government’s stated intention is not to bring those people within the realms of the legislation.

I feel that it could be a deterrent for the market as a whole. Many of our constituents are cautious, and we could end up with a scenario whereby, just as a matter of fact, people buy only once they have sold. We could end up with a market in which people sell their house first and consider buying only after they have sold, to make absolutely sure that they are not liable for those thousands of pounds.

In some cases, that might be the right decision, but if that were the effect on the marketplace, I think that it could have a detrimental effect on the economy, and it could slow down parts of the housing market in a way that we do not want. If we allow that to continue for six months, it may take some time to right the market. Therefore, I think that we are better to look carefully at it now.

Of course, Revenue Scotland may prefer the option that Mr Swinney suggested. That would make it cleaner and simpler for it. However, I urge Mr Swinney, in his closing speech, to say that he will at least speak, in particular, to more of the legal profession—those who represent consumers and house buyers—to get as much data as he possibly can before taking a final view. If he does that, I am convinced that he will hear from some of them—expressed strongly—that something needs to be done.

In the committee, we heard that one option is to have a grace period. I certainly think that that is one way of working, although I do not think that the suggestion of a 30-day grace period goes anywhere near far enough. If a housing sale falls through, it is pretty unlikely—although not impossible—that the average house sale will then happen in 30 days. Looking at different websites, it seems to take on average eight to 12 weeks to sell a house, so if the grace period were to be 30 days, a lot of people would be captured.

I urge the Deputy First Minister to give serious consideration to the issue. He said that he is not closed to the idea, and I would personally commit to working with him to find a solution. Although I will not have any constituents post-April, I genuinely believe that a number of constituents would see the issue as a huge matter of regret. We would then have to take emergency action to deal with it. Therefore, I urge the Deputy First Minister to indicate in his closing speech that he would be willing to discuss that matter.