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I do not think that we can express it in those terms. First of all, as I indicated, the data shows that the numbers of registered landlords and registered properties are staying flat—indeed, there has been a slight increase in the number of properties in the recent period. That suggests that the anecdotal evidence that landlords are leaving the market is just that—it is anecdotal. At this stage, the data absolutely does not support it. As I said, we have seen a reduction in the number of second homes over a period of time, and I think that that trend predates the increases in ADS. Clearly, the policy is moving in the right direction.

As you rightly say, the amount of revenue raised in the most recent period has been in excess of the SFC forecast, taking into account the behavioural changes that it has factored in, so that policy objective is being delivered. It is self-evidently true that the measure puts buyers who do not have to pay ADS in an advantageous position over buy-to-let landlords, which is clearly the policy intent.

That is an interesting point and I can see the member’s line of thinking. I am not aware that that specific analysis has been done, but I will undertake to look at that scenario to see whether we can furnish the member with data.

It is an on-going process and will help to inform the broader LBTT picture. At each point in the budget cycle for the annual budget, we make decisions about what tax rates should be. At this point, I think that making the change in ADS rates is the right decision.

Thank you very much, convener. Good morning to you and the committee, and a happy new year to you all.

The Land and Buildings Transaction Tax (additional amount: transactions relating to second homes etc) (Scotland) Amendment Order 2024 provides for the changes to the land and buildings transaction tax rates and bands that were set out in the Scottish budget on 4 December 2024. It increases the rate of the additional dwelling supplement from 6 per cent to 8 per cent, with the change intended to protect opportunities for first-time buyers and home movers by further helping them compete with buy-to-let investors and second home owners.

The change is also forecast to raise much-needed revenue at a time when public finances are under significant pressure. The Scottish Fiscal Commission estimates that it will raise an additional £32 million in 2025-26 and £31 million a year on average over the remainder of the forecast period through to 2029-30.

As you will be aware, the legislation provides for the rate increase to take effect the day after the Scottish budget statement—that is, on 5 December 2024. That is now a well-established arrangement for such changes; it prevents the possibility of forestalling, which would have reduced the revenue impact next financial year and would have run counter to the policy intent. It is also intended to provide certainty for taxpayers with the acknowledgement that the legislation must be approved by the Scottish Parliament in order to remain in force. As with previous rate changes, the order includes a transitional provision to ensure that anyone who entered into a transaction on or prior to 4 December will not pay the increased rate.

At this point, I take the opportunity to remind the committee of my entry in the register of members’ interests in respect of ownership of residential properties for let, and I look forward to members’ questions.

My point is that the investment to build additional stock for the market is not impacted, because companies that are investing significant amounts to build large numbers of properties are excluded from ADS. As I said, the data that we have suggests that the number of individual registered landlords has been broadly static for the past three years or so, and that the number of properties that are registered for let has increased. That would suggest that there is not that impact on the market.

It is important to recognise that the housing market is always going to be a mixed market, if you want to call it that. People will want to buy houses and people will want to rent them, because they want to stay somewhere for a short period of time or because it suits their financial, family or employment situation. There will always be a need for people to rent properties, so a supply of rental properties is obviously important to have in the mix. It is not that we want everybody to be a property owner; it is about recognising that there is a mixed market and understanding what policy measures we can take that are best suited to ensuring that the market is well balanced.

The measure, which supports first-time and other buyers to live in properties by giving them a competitive advantage, is the right thing to do. It fulfils a policy objective and raises additional revenue, which is clearly welcome, but there is no end game in the sense that we do not want to significantly alter the market in terms of the number of rental properties versus the number of owner-occupied properties.

Thank you for raising that issue, which I know you have raised before. There have been several tweaks made over time to the eligibility process, as various issues have arisen. We can certainly look at what scope there is to address that issue.

The purpose of the policy is to raise revenue and rebalance the market so that people who want to buy a house to live in—first-time buyers or otherwise—have a competitive edge over those who are buying a property to let.

The data shows that the number of registered landlords is broadly flat, and the number of registered properties has increased over the past two and a half to three years, so the policy is not having an impact on that.

Thank you very much.

They are linked in the sense that, if you want to build new properties, there are a range of factors to be considered that are relevant to those decisions. However, at that end of the market, ADS does not apply to the purchase of more than six properties.

A typical buy-to-let landlord does not build a new property to put on the market; they buy an existing property to let it out. A property is either going to be bought by them or by someone who wants to live in it, but the total number of properties in the market stays the same.