Committee
Finance Committee 28 September 2016
28 Sep 2016 · S5 · Finance Committee
Item of business
Land and Buildings Transaction Tax
David Melhuish
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Yes. That is in the £250,000 to £325,000 range.
In the same item of business
The Convener
SNP
Item 2 is a continuation of our evidence taking for our inquiry into the first year of the operation of the land and buildings transaction tax. Today, we wil...
David Melhuish (Scottish Property Federation)
You did, convener.
The Convener
SNP
We will also hear from Professor Mark Stephens of Heriot-Watt University. I warmly welcome our witnesses to our meeting. Members will have received copies of...
Ivan McKee (Glasgow Provan) (SNP)
SNP
I thank the witnesses very much for coming to the meeting. The first issue that I want to explore is the impact of the change to LBTT on the Scottish Govern...
David Melhuish
Yes, I am quite happy to refer to that. There were quite a few questions in there. There is a point I should make about the tax take for 2016-17, which you ...
Ivan McKee
SNP
Do you have a value for that?
David Melhuish
I think that it is over £16 million.
Ivan McKee
SNP
In which period?
David Melhuish
I think that that is up to the end of June, so it might not include July. At that stage, the residential figure was £65.5 million for the 2016-17 financial y...
Ivan McKee
SNP
That is correct. The figure for the first three months was £65.5 million.
David Melhuish
As I have said, the ADS is quite a significant slice of that, and at the moment, we do not know how much of that should be repaid. I think that there is an 1...
Ivan McKee
SNP
The issue is what the run rate for that was before and whether it is significantly more now. With the ADS, we would expect a forestalling effect to hit in th...
David Melhuish
The best estimate that I have seen is from the Scottish Fiscal Commission, which I think came out with an estimate of around £7 million. Our take on £1 milli...
Ivan McKee
SNP
Who has estimated that?
David Melhuish
I think that the Scottish Fiscal Commission estimated that in its outturn report.
Ivan McKee
SNP
Is that against the forecast?
David Melhuish
Yes.
Ivan McKee
SNP
Right. We really have to compare that against previous years, as the forecast was revised upwards, and it was not met. For a true comparison, we have to look...
David Melhuish
Yes. That is in the £250,000 to £325,000 range.
Ivan McKee
SNP
It is in the £325,000 to £750,000 range. There were 1,991 transactions in Q1 of 2016. That is at the bottom of page 4 of your paper.
David Melhuish
Are you referring to the table?
Ivan McKee
SNP
Yes—the table at the bottom of page 4 of your paper.
David Melhuish
The figure for 2014-15 is 7,555 for the range £325,001 to £750,000.
Ivan McKee
SNP
That is right.
David Melhuish
That goes down to 7,390 for the first year of LBTT.
Ivan McKee
SNP
Yes. That is the forestalling effect. At Q1 of 2016, it is back to almost 2,000, or 8,000 annualised.
David Melhuish
If you annualise that figure, obviously we must see it—
Ivan McKee
SNP
Sure, but the point that I am making is that there is absolutely no evidence that there has been any hit on transactions or revenue.
David Melhuish
That was just a straightforward number-for-number comparison between the last year of SDLT in that price range and the first full year of LBTT. I think that ...
Ivan McKee
SNP
Yes. There were 165 fewer transactions, which is around 2 or 3 per cent. That is minimal if we compare the forestalling impact.