Hansard

The Convener SNP

Item 2 is to continue to take evidence in our inquiry into the first year of operation of land and buildings transaction tax. We will have two separate sessi...

Lady Susan Rice (Scottish Fiscal Commission)

I will just say a few words. I thank the committee very much for having us at the meeting. Most of you met us during your business planning day, but we thou...

The Convener SNP

That means that you get to answer all the hard questions, Charles.

Lady Rice

Charles Nolan is our interim appointee, approved by members, until 1 April next year. He came on board at the beginning of the summer and has jumped in with ...

The Convener SNP

Thank you, Lady Rice. We have asked questions about the compatibility of different sets of figures in previous meetings, so your explanation of how different...

Professor Campbell Leith (Scottish Fiscal Commission)

I will take this one. As you said, three economic determinants go into the residential LBTT forecast: the average house price, the median house price and the...

The Convener SNP

Okay. It is complicated. The forecasts were not quite where the outturn turned out to be, so where in the forecasting process did that disparity, if that is ...

Professor Leith

Table 1 in our outturn report shows exactly what we tried to do. The first column in table 1 gives details of what was forecast for the relevant economic det...

Ivan McKee (Glasgow Provan) (SNP) SNP

Before I start, I draw members’ attention to my entry in the register of interests with respect to property investments. There is obviously quite a lot in t...

Professor Leith

There are a lot of points there; I will try to remember each of them. Table 1 does not just compare the forecast with the outturn; it tries to decompose the...

Ivan McKee SNP

Basically, the data that I have—which I have not had time to compare to your log-normal distribution—says that the number of transactions in the £325,000 to ...

Professor Leith

The average numbers pre and post-financial crisis were a bit higher and lower. If we looked at those two relative averages, I would expect that the share wou...

Ivan McKee SNP

Okay. Are you saying that you cannot answer the question, “Has the change to LBTT hurt the tax take to the Scottish Government?”—which I think is the key que...

Professor Leith

Yes. It is a different tax regime, so we were not expecting it to generate the same amount of tax.

Murdo Fraser (Mid Scotland and Fife) (Con) Con

I will pursue some of the questions that Ivan McKee raised. Table 3 in your paper shows the outturn revenues compared with the forecast revenues. It is clear...

Professor Leith

Yes, that is possible. We have Revenue Scotland data only for the entire band; we do not have data on sub-bands within the band. If we had such information, ...

Murdo Fraser Con

In a previous session, the committee picked up that having the ability to interrogate the data further to understand what is happening within such a broad ba...

Professor Leith

Yes. Transactions appear to have been brought forward into March, which was a particularly buoyant month. As the situation was not obviously as buoyant in th...

Murdo Fraser Con

So, in the absence of that forestalling effect in this financial year and subsequently, we might expect that to disappear and a more normal pattern to appear.

Professor Leith

Yes. In the report, we look at March and then we look at April to identify whether the buoyant returns in March were sustained into April. Our tentative conc...

Murdo Fraser Con

My final question, which goes to the heart of the matter, is about your comments in paragraph 3.24 about what has been happening in the market, particularly ...

Professor Leith

We cannot draw that definitive conclusion based on the limited data that we have at the moment. The report notes that that is the band in which revenue seeme...

Murdo Fraser Con

At what point will we have sufficient data to be able to draw conclusions?

Professor Leith

We would need to rule out all other options. We would need to rule out the possibility that damage to the property market in the Aberdeen area is causing the...

Professor Charles Nolan (Scottish Fiscal Commission)

In principle, that could take quite a long time. Even with the additional dwelling supplement, it will be 18 months down the line before we have the final da...

Murdo Fraser Con

You are keeping a close eye on the issue and monitoring it.

Professor Nolan

Yes. Most of the tax take comes from the top two bands so, clearly, in forecasting the tax take, you want to get those two right.

The Convener SNP

You have just had a discussion with Murdo Fraser about the breakdown of the figures in the £325,000 to £750,000 band. We have discussed that with other witne...

Professor Leith

We requested data broken down as much as possible. The data that was received was broken down by price band. I do not know whether further breakdown would be...

The Convener SNP

We have witnesses from Revenue Scotland next, so we can follow that up with them.