Accelerating home-building in Scotland: Summary of consultation responses

Summary of Responses

Option 1: Introduce fiscal measures to tackle inactivity or slow build-out

Question 1: Could fiscal incentives offering relief to other charges help to accelerate build-out rates? Yes/No/Unsure. Please explain your answer.

There were 70 responses to this question. A breakdown of responses by respondent category is provided in Table 1.

Many respondents highlighted the range of external factors that can delay build-out such as infrastructure constraints, section 75 negotiations, market demand, labour and materials cost and availability, availability of private and development finance, interest rates and adverse weather.

Of those respondents who answered ‘yes’, many suggested that the fiscal incentives should be targeted at Land and Buildings Transaction Tax (LBTT), the Scottish Building Safety Levy (SBSL), brownfield development, Registered Social Landlords (RSLs) and rural housing sites. Others commented they were in favour of incentives rather than penalties to accelerate build-out rates.

Of the respondents that answered ‘no’ and ‘unsure’, many had concerns about the limited effectiveness of any fiscal incentives to accelerate build-out. Others commented on housebuilder delivery models with support for a wider range of housing delivery models.

Question 1a) Which charges / taxes / levies could the incentives be applied to? Please explain your answer.

A total of 52 respondents answered this open question and provided comment.

Many of the respondents referred to using incentives for LBTT and SBSL, however there were different views on how this should be implemented in practice. Other incentives mentioned included a Council Tax based incentive, a rate of Value Added Tax (VAT) change and reduction in planning-related charges. A small number of respondents did not support the implementation of any charges, taxes or levies.

Some respondents wanted incentives to only be applied solely to housing delivery with a few respondents wanting a focus on incentives for development in brownfield land to help improve site viability. A few respondents noted that they would want exemptions from punitive measures such as taxes for smaller or rural developments.

A number of respondents were concerned that the implementation of any punitive mechanisms may deter investment and risk development viability. These respondents also had reservations on the impact of such measures on increasing build-out rates.

Question 1b) Should relief be in the form of full exemptions or variable rates? Full exemptions / variable rates. Please explain your answer.

There were 36 responses to this question. A breakdown of responses by respondent category is provided in Table 2.

Those respondents supporting ‘full exemption’ thought this approach was appropriate where transactions might not otherwise occur - e.g. for first time buyers and the resale of undeveloped allocated housing land. A few suggested that it would enable those who could deliver as permitted to reinvest in new opportunities timeously. It was noted that it is common practice for planning permission to be issued with triggers for the delivery of infrastructure prohibiting or restricting the delivery of housing or marketing conditions. A suggestion was made about full exemption at the point of early delivery, followed by gradual relief reduction to provide a proportionate incentive and maintain build-out momentum.

Those respondents in favour of ‘variable rates’ cited greater flexibility and fairness. This approach was seen as tailored to different site conditions, market factors, and development constraints. It was viewed as being a proportionate and targeted way to incentivise build-out, avoiding windfalls or rewarding activity that would occur anyway, while allowing support for SMEs and complex or constrained sites. It was also noted that variable rates could allow for clawback where delivery commitments would not be met. A view was expressed that local authorities should be exempt from any charge linked mechanism. Many thought that overall, this approach could introduce additional complexity and administrative burden if not carefully designed.

Some respondents commented more broadly that housebuilders should be encouraged to build and the threat of taxes, charges and levies is unlikely to achieve this goal. A few commented that more detail is required to provide a fuller response.

Question 1c) Could a tax impact differently on different types of landowners? Please explain your answer.

A total of 57 respondents answered this open question and provided comment.

Most respondents agreed that a tax would impact differently across landowners due to scale, resources, finance capacity, ownership and site characteristics. Smaller landowners and SMEs were seen as particularly vulnerable, with limited ability to absorb additional costs or manage risk, especially on constrained or marginal sites.

In contrast, larger landowners and volume housebuilders were viewed as better able to absorb or pass on costs, meaning a tax could be reflected in higher land values or house prices rather than faster development. A clear distinction was also drawn between landowners and developers, with many noting that build-out rates are often influenced by market conditions, infrastructure, and planning processes rather than landowner behaviour alone.

There was strong and consistent support for exemptions or relief for RSLs and public sector bodies, reflecting their non-profit models and reliance on funding, procurement processes, and infrastructure delivery rather than market sales rates.

Respondents warned that a uniform tax could have unintended consequences, including discouraging land from being brought forward for development, reducing SME participation, and constraining overall land supply. Many emphasised the need for any policy to account for site-specific constraints and external delays, with targeted exemptions, deferrals, or thresholds to avoid penalising those unable to accelerate delivery and to prevent undermining housing supply, particularly affordable housing.

Question 1d) Please provide any evidence of how fiscal measures linked to other charges would impact development finance to influence build-out rates.

A total of 51 respondents answered this open question and provided comment.

Many respondents emphasised that development finance is highly sensitive to the timing and certainty of costs: front‑loaded or uncertain charges can weaken financial appraisals, reduce lender confidence, and constrain access to borrowing. This is particularly significant for marginal sites, SMEs, and affordable housing providers, where tighter margins make schemes more vulnerable to additional costs. Several responses highlighted that increased costs or risk could lead to more conservative lending terms, reduced loan availability, or higher equity requirements, ultimately slowing build-out or preventing projects from proceeding altogether.

Conversely, targeted incentives-such as upfront cost relief, demand-side support (e.g. LBTT relief or shared equity schemes), or deferral of charges-were seen as improving cashflow, strengthening viability, and supporting quicker delivery by aligning costs with development milestones.

There was also a consistent view that fiscal measures alone are unlikely to significantly accelerate build-out rates, with many respondents stressing that delivery is more strongly influenced by structural factors such as market absorption, infrastructure provision, construction costs, and wider economic conditions. While some respondents noted that well-designed penalties on stalled sites could alter behaviour-encouraging earlier delivery or discouraging promotion of undeliverable land-others cautioned that poorly designed or punitive measures risk being counterproductive, further suppressing viability and slowing delivery.

Overall, responses indicated that fiscal measures are most effective where they reduce risk and support development finance, rather than increase costs, and that they should be implemented alongside broader interventions-particularly infrastructure investment and demand support-to address the underlying constraints on build-out rates.

Question 2: Should we introduce a tax on sites which have been allocated for residential development and/or have permission for homes, but are not being built out as expected, as set out in option 1? Yes/No/Unsure. Please explain your answer.

There were 76 responses to this question. A breakdown of responses by respondent category is set out in Table 3.

Many respondents highlighted that a tax would prevent build-out and harm viability, that any tax should have exceptions and that it could lead to deallocation of sites. Others mentioned that build-out rates have complex factors that can lead to delays, and this should be taken into account.

Of those respondents who answered ‘yes’, many suggested that a tax should focus on larger developers, based on timescales of consent. Others commented on the potential to target under delivery of allocated sites. Others suggested that the focus must be placed on private developers and provide an option to sell to affordable housing groups.

Of the respondents that answered ‘no’ and ‘unsure’, many had concerns about the potential effects of any tax on delivery and viability. Others commented on the complex factors that can slow down build-out rates, that may not be the landowners or developer’s fault. Others mentioned the need for wider land reforms and that the information does not currently exist to adequately implement such a tax. Others had concerns regarding the potential harm to public sector landowners.

Question 2a) Should this apply to allocated sites, sites with permission, or both? Allocated sites/Sites with permission/Both. Please explain your answer.

There were 29 responses to this question. A breakdown of responses by respondent category is set out in Table 4.

Of those respondents who answered ‘allocated sites’, many suggested that this would help counteract the land value increase post allocation. Others suggested that this will lead to an incentive to apply for planning permission, after sites have been allocated.

Of the respondents that answered, ‘sites with permission’, many suggested that this should focus on where permission is granted and where there has not been significant progress in development of the land. Others suggested that this would be less likely to cause uncertainty and will be less likely to put off developers.

Of those respondents who answered ‘both’, many suggested that the focus should be on allocated sites where land has not progressed, and that discretion should be applied to allocated sites.

Of those respondents that did not answer and stated that they wished for neither, many had concerns that this will risk less development as sites become less viable, and that it could risk sites not being promoted for inclusion within Local Development Plans. Others suggested that any tax is unreasonable and will increase uncertainty. Some also highlighted that there are many reasons for delayed build-out, and that a focus on allocated sites could risk land supply and risk sites coming forward.

Question 2b) How should the tax be calculated? Please explain your answer.

A total of 50 respondents answered this open question and provided comment.

A number of respondents referred to the need for a simple, time-based calculation, with some mentioning that this should be graduated and others mentioning that this should include exemptions. Many respondents emphasised the need for a defined grace period before any charge is applied, allowing for initial site mobilisation and the resolution of technical and infrastructure constraints.

Some respondents mentioned a value-based calculation, either of land, units or Council Tax, dependent on the progress of the site. Others mentioned that this should include exemptions as well, dependent on the circumstances. Of those respondents, many suggested that this should be location specific, that it should be up to local authorities, and others suggested that a national definition of exemptions would be the best method.

A recurring theme was that any calculation mechanism should account for external factors beyond the control of developers or landowners, to avoid penalising legitimate delays. Many respondents highlighted their opposition to any tax.

Question 2c) Who should be required to pay the tax? Please explain your answer.

A total of 53 respondents answered this open question and provided comment.

A number of respondents referred to landowners as being the preferred option of who should be required to pay the tax. Others highlighted that any tax on landowners should carry stipulations, including who has control over delivery. Some respondents noted that liability may change over time depending on who controls delivery at different stages of development, suggesting a need for a flexible approach rather than a single fixed liable party.

Other respondents stated that the tax should be applied to the developer, with some mentioning that this should be in the case of sites with planning permission, or if they have any agreement or options with the landowner. Others said the tax should rest with those who control development timelines, and if they have taken over the development delivery.

Many respondents stated their opposition to any tax, with some mentioning potential difficulty in finding who to target the tax towards, and others highlighting that there are complex issues of land control.

Question 2d) Should the tax operate as a local or a national tax? Local tax/national tax. Please explain your answer.

There were 28 responses to this question. A breakdown of responses by respondent category is set out in Table 5.

Many respondents highlighted the complex nature of implementing a tax, and whether the increased administrative costs would be worth the revenue provided by any tax. Concerns were also raised about the capacity of local authorities to administer such a tax consistently, with some respondents noting existing resource constraints within planning services. Some stated their opposition to any tax, preferring incentives.

Of the respondents that answered ‘National Tax’ many suggested that this would require a national framework, to ensure consistency of approach. Some suggested that this will be simpler and will allow for a greater capacity as it will reduce administrative burden. Others stated that a National Tax should allow for local proportionality, with a number suggesting that any revenue be redirected towards local authorities.

Of those respondents who answered ‘Local Tax’, many suggested that this would allow for the differing circumstances in local authorities to be taken into account, including differing land values, and it would allow for increased funding to local authorities to tackle housing issues locally. Others suggested it would be easier to implement and could be optional. Others suggested that it would place an increased burden on local authorities, and there are differing levels of capacity at local authorities to accommodate this. Respondents highlighted the potential for inconsistency in application between areas, which could create uncertainty or uneven impacts across Scotland.

Question 2e) How should any income be used? Please explain your answer.

A total of 56 respondents answered this open question and provided comment.

A number of respondents referred to the need for any income to be ringfenced. This could be for the acceleration of housebuilding or infrastructure, including any infrastructure risks that have delayed build-out. Some respondents suggested that ringfenced funds should be for affordable housing, or to ensure the delivery of sites. Some respondents specifically emphasised the use of revenue to unlock stalled or constrained sites, including through targeted enabling works and viability support.

Other respondents suggested that the income should be aimed towards planning and increasing capacity, others stated that this could be for surface water sewers, or that it should be down to local authorities to decide how it be spent, dependent on the need for different facilities.

Question 2f) Please provide any evidence of how a tax connected to sites allocated or permitted not being built out would influence build-out rates.

A total of 49 respondents answered this open question and provided comment.

A number of respondents referred to the potential harm to development viability, and build-out rates, with some specifically mentioning the potential to constrain development of affordable housing. Others mentioned the risk of deterring developers who could unlock constrained or stalled sites. Some respondents noted that the tax could influence behaviour, encouraging landowners to release sites or enter into partnerships with delivery-capable developers.

Other respondents highlighted the Irish Residential Zoned Land Tax as a good approach and some mentioned the potential of a tax to stop land banking. A number of respondents suggested that a tax would be complex to introduce and is untested in Scotland, which could provide its own risks. There were concerns about unintended consequences, including discouraging landowners from promoting sites for allocation, increased legal disputes, or strategic behaviour to avoid liability without delivering homes.