Income tax 2022-2023, W-2 income tax software example. Let's do some wealth preservation with some tax preparation. Here we are in our example Form 1040 using LASERT tax software to populate it. You don't need tax software to follow along, but if you have access to it, it's a great tool to run scenarios with. You can also get access to the Form 1040 related schedules and forms at the IRS website irs.gov. Support Accounting Instruction by clicking the link below, giving you a free membership to all of the content on our website broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. IRS.gov, our starting point as per usual with our starting point, single filer, Mr. Anderson, we've got no dependence down below. We're starting out with that 100,000 just an even number on the W2 income, and then we've got the standard deduction. Although I had another thousand in there, we took that thousand out. So then we just have the standard deduction at the 12,950 getting us down to the 87,050.  So 87,050 and then we'll let the tax software calculate the tax on page two at the 14774 so we'll pull that on over here 14774. So there's our starting point. Now the W2 is basically the document that's most thought of when we think about the income tax preparation, one of the most prevalent types of documents, but it can also be one of the more confusing ones because it does have a lot of kind of data input fields within it. So let's just do some comparison with some different kind of mock W2s. This is just in an Excel worksheet and we're focusing in over here on basically the boxes of the W2s because these first three boxes are basically kind of income lines and these second three boxes on or the boxes on the right are going to be the taxes related to those kind of taxable income lines. This is going to be important to understand for the data input, although we can kind of mindlessly and most software do the data input. We want to understand what's going on with these kind of different boxes and what's happening with them so that we can understand what the software is doing, see if it makes a problem, be able to correct then the problem, and then we can also communicate with our clients about these different line items as well. So this first one we can see of course box one, three and five are the same. This will often be the case if you're at a lower income site W2 threshold for example and you do not have access to something like many benefits at the job like a 401K which is a common example which might be a differentiating factor. So if you saw something like this it would be a pretty straightforward kind of data input. Let's just kind of put that in here. We'd be putting into the data input the data input field. Now we've got other informational kind of stuff that has to be put in with the W2 as we have more tax software the IRS wants more and more information, right? So now they're going to want a little bit more data in terms of the employer identification number, their address and whatnot as we do the W2 input. But I'm just going to focus in on the data input for the amounts. So I've got 40,000 here. Now this amount, the second amount we're going to have to do the data input because that's not a flat tax. That's going to be like a progressive tax based on the tax tables because that's our federal income tax. So therefore the software can't really help us out to populate that. I've got to manually put that into place at the 4,000. So that's going to be 4,000. However the social security wages usually can be manually input. So notice I have to put this line which is actually social security wages, not the social security tax. Now oftentimes I didn't do the data input, the software is doing the data input because it's kind of assuming based on the rules that it's the same 40,000 because I didn't hit the cap for social security and they're correct. So that matches what's on my W2. Notice all this other stuff because it's black, it's showing and not blue. This software is trying to show that hey, they did the calculation for us. Now why is it possible that the software can do the calculation? Because these other two taxes are basically more like flat taxes. There's systematic rules that are a lot easier to calculate. So the 40,000 for example, times the .062, that's how the software is coming to that 2480 because the social security tax is basically a flat tax. We shouldn't have to do the data input, we should just be able to double check it if we've got the right dollar amount. Then they have the 40,000 for Medicare wages. Notice we have different data input forms but it's trying to guess that that's going to be 40,000 as well based on the data input on the first box. And if I take that 40,000 times .0145, 1.45%, that's how we're getting to the 580. So those two should be fairly easy to kind of check and verify and if I look at my W-2 form over here, those numbers were populated and everything looks good. Now on the bottom of the form we've got the state taxes. I'm not going to deal with the state taxes for our federal income tax example. That will depend on if you're in a state that mirrors the federal income tax system in which case it'll be much the same kind of process without the social security and Medicare but basically just these first two boxes and if you're in a tax that has a sales tax as their primary mode of taxation in the state, then you may not have any taxes for the income tax because they don't do that. They chose to do some other form of tax. So if I go to page one now, I could say, okay, now I've got the 40,000. If I want to mirror that in my tax formula worksheet, I'm going to say we have W-2 wages of 40,000. If I pull that back on over, okay. And then we've got still the standard deduction. So I'm going to go back on over here of the 12,950. So I can verify the bottom line should be 27,50. So there's the 27,50. Let's go back here. And then page two is going to be the 3044. I'm going to rely on the software to calculate that 3044. And then the withholdings, according to my W-2 now, the withholdings for federal income tax was 4,000. So I'm going to populate that in my worksheet here at the payments of 4,000. And that will pull back on over to the first page of the 1040 at 4,000, leaving us with a refund of 956. So we can kind of check that over here. There's the 4956. So you can see how you can kind of check everything out. Notice what you might be saying is, hey, look, I didn't see anything about this stuff. Why do I even need the Social Security, the Medicare and the Medicare tax? Oftentimes that might not be populated on your federal income tax reported on the form 1040 because it's already been dealt with. And so it will only be populated on your form 1040 if there was an issue with it. For example, if you over withheld oftentimes on the Social Security because you have multiple W-2s, or if you have some other form that you're paying Social Security and Medicare, such as if you're a sole proprietorship and you have self-employment tax, which is kind of the equivalent for a sole proprietor, which we will get into later. So if there's an issue that that could pop up and maybe we'll do an example with that. But before we get there, let's say we had a little bit more complex one. And now we're going to say that the income is higher. They made 150,000. Now, if that's the case, the Social Security caps, I believe in 2022 at 147,000. And then the Medicare wages is going to be doesn't have a cap. So it'll be at 150 if there was nothing else. There's no difference between Medicare and Social Security. And the federal income tax is there was no nothing else down here that could have been deducted from box one, such as like a 401k is a common example or some kind of possibly other benefits like health benefits and whatnot. So let's go back on over and just see the data input with that one. So if I was to do that, I'm going to say, okay, they made 150,000 in box one. And then I have to populate box two because this is going to be based on whatever they put on their W for. So I'm just going to have to put in whatever they have there. I got to do the data input. They can't help me with just a tax rate because it's a complicated tax system, a progressive system, 37, 5, 37, 5. And then, but notice here, I didn't populate the Social Security and the software basically knew what the Social Security cap should be. So and that should be the case over here because if I made 150,000 on one job, one W two income job, and that's my only income, then the system can see, oh yeah, well, you should have capped at the 147.5. And that then would calculate 6.2% of it 9441. And that's where we get the 9441. And then the Medicare doesn't have a cap. So that's why it jumped back up and the Medicare 1.45% is populated for us. So if I jump back on over to the 1040, now I've got on page one, we have the 150,000. If I mirror that on my worksheet over here, I could say, okay, page, this is going to be 150,000. And then if I jump back to the first page, there is that same standard deduction that gets us to the 137.50. So 137.50 looks good. Page two, then 267.28. I'll let the software do the calculation for the tax. 26, 267.38. That's not right. 267.38. Like what did you just type there? Where did you come up with that? You didn't even, that wasn't even 267.28. For goodness gracious. I don't trust you to type in. Okay, I got it. All right. I just double check. That's why I double check it over here. Okay. Any case. Then we had the withholding 37.5. 37.5. So we'll put that in the payments. 37.5. And pull that on to page one. So that comes out to the 10772. 10772. Just to do a quick kind of recap. I'm just kind of just trying to summarize this on both sides. We kind of see it in a formula format. And so, so again, you see that, you see that difference on the data input. And then if someone was to ask you obviously what their earnings were, it would be the 150, not the 147, right? If they're trying to think of what their compensation, but you can imagine, and in many situations you will have, a case where box one is lower than possibly box three and possibly box five often times. In that case, if someone asks you how much did I actually earn? You don't really want to be representing that with box one. And this gets kind of confusing because people often have issues when they're talking about how much they earn compared to how much possibly their spouse has earned and how much tax they should be paying versus how much their tax, their spouse is paying because the tax rates are being kind of manipulated based on both of their income. That becomes an issue. And when they're working at their job, they need to know how much they're actually earning because they're going to do comparisons with other people that are earning whatever they're earning. And honestly, sometimes because of the complication with the way things are set up, people start to think, well, box one is my earnings. And so they're not taking into consideration the fact that they're earning more than that because you're getting compensation in the form of benefits. And the reason that you get the benefits is because you get a tax break on it. So it's actually you're getting more compensation because of the benefits. So really kind of box five is more closer to your actual wages and it's good if there's a big difference between box five and box one because that means you're taking substantial advantage of benefits which are giving you those benefits plus of giant tax break on the benefits. So it gets kind of messy. Obviously taxes kind of messy, make everything more messy. But let's enter something like this. So this might look something like this. So this usually happens for a higher income individual, of course. So now we're going to say box one says 140,000. That's what box one said. And then box two is 35,000. So I'll say, okay, 35,000. And then box three is Social Security, which it capped for us once again at 140,000. It should be 140,000. But that's not right because this box is low due to the fact that we put money into the, I'm going to say that's a retirement plan. So I'm going to say, all right, so 140,000. So I have to actually manually input now 147,000. It couldn't guess the right number. Tried to guess, but it's not right because of that difference. Now that I've input that, it calculates the Social Security properly because it's 6.2% of whatever the Social Security wages are. And then on the Medicare, we're at 150,000. So again, it can't really guess that number. It's taking the larger of the two, but it's really 150,000. And so now once I input that, it can calculate the Medicare because the Medicare is just a flat rate based on those. And so then we got in box 12, you'll often see these little letters and you can look at the instructions for the W-2. And that'll be, I believe, by a 401k plan. So if I go into box 12, I'm going to say D. There's the 10,000 and that's kind of an informational thing saying this is why there's a difference between box one, the wages for the federal income tax and the wages for the Medicare because there's that $10,000 difference. Why is the Social Security different? The Social Security is different because it got capped at the 147,000 and possibly the reduction of the 10,000 from the federal income tax we're saying isn't a reduction for Social Security. So it got capped at the 147 because it would have been 150 then if it's not going to be decreased by that 10,000 like the federal income tax, but then it got capped at the cap for Social Security 147. There is no cap for Medicare, so it's at the 150. So you can see how this gets a little bit messy, but most of the time the W-2 is populated properly so we don't have any really issue over here. We're just really kind of calculating the federal income tax type side of stuff. Okay, so I won't put that back on over into the other form right now. I'll just run a different scenario just so we can see an example of where a problem could happen. Notice that I hit the cap here at the 147 with this one W-2 income but what if they worked at two separate jobs? Then you're going to have a situation where they could go over the Social Security cap. So let's say we had this W-2 and then this W-2 for the same person, right? Then they're going to have overpaid on the Social Security wages if I combined them together. For example, I'm going to go back on over and say I have a single individual, a second W-2, W-2-2, and then this one was 40,000 and we're going to say that we withheld, let's say 4,000 we said. So 4,000 withheld. Now the issue is the total of the two Social Securities are over the cap for an individual which should be 147,000 at the cap. So that means we overpaid the tax on the Social Security by this 40,000 times the 6.2 or the 2,480. So if I go back on over then and I try to look at this, I'm going to say, okay, the first page looks like normal but then if I go to the second page, I'm going to say, okay, the tax was calculated, okay, boom. But then I've got this item down here, a amount from Schedule 3, Line 15. Schedule 3 is now populated, Line 15. So I'm going to say that Line 15 is going to be, boom, that's going to be AdLines, Line 15 from right here, from Line 11, excess Social Security. So if you see W-2s that have large dollar amounts in them and then you see multiple W-2s for one individual, it's likely that they paid more into the Social Security than they should have because they paid over the cap. So that's not going to happen all the time. It's only going to happen when you have high-income people that are basically working as employees and they have multiple places that they're working for that you might see that happen. Notice the software can help to catch that kind of thing from happening, which is great, but we would like to be able to intuitively see when that would happen and you get an intuitive sense. Well, the people are making a lot of money. I expect something like that to happen because there's two W-2s and they're high-income earners so they might go over the Social Security limit. And then when the software does do it, you want to be able to double-check it and say, ah, you shouldn't just be like, well, the software does whatever the thing does. You'd like to be like, well, why did that happen so that we can know what happened and also we should be able to explain that line item to a client. So we might dive more into that when we get into Social Security in a future presentation. Now obviously you could, if you are a single individual, you might have multiple W-2 wages and it gets messy as well when you've got different kinds of income, W-2 income, dividend income, interest income, Schedule C income, Schedule E income and stuff. So we'll get into more complex tax returns later, but those can complicate things in different areas such as the Social Security, for example, because if you have self-employment income, which is a Schedule C, then you also are paying Social Security on self-employment and if you also have W-2 income, you've run into that similar kind of situation. Now if you have a married couple, it's quite likely that you have W-2s from the two married couple. So in that situation, it becomes relevant. We have to actually assign out oftentimes which spouse the W-2s are going towards because now you have two different people, although married, that are paying in to do two different Social Security funds. That's one reason we still have to kind of track their income separately so that the proper amounts are being allocated to the Social Security and if one person paid over on the Social Security, we can see that. So let's see an example. Let's put them in a married couple. Okay, so now I have married filing joint. So we've got Mr. Anderson and Jane Anderson. Why don't I have a checkbox up here and then I'm going to go down and so now I've got that same 180,000, the same scenario with those two W-2s but now the standard deduction is 25.9 so instead of the 12.950 and then on page two, tax is calculated. I've got the federal income tax withheld but the point I want to make here is that this 2004-80 is still there. Why? Because even though married, I assumed both those W-2s, I indicated on the software that they were for one spouse instead of two spouses. Now, if those two W-2s were for two spouses, then I wouldn't have an issue with that overpayment, right? So now I'm going to say, okay, these two W-2s were for the same spouse. What if this second W-2 was for another spouse? You're the spouse. Well, then we shouldn't have a problem if I go back on over and say this one was spouse item. And by the way, when I entered the fact that this one had a $10,000 amount, I should check off the retirement plan kind of thing to put that in the indication and that'll be indicated on the W-2 in... Where is it? In box. In box 13, generally, I believe it is. But in any case, let's go back on over and say, okay, so now the point is... The point is... That I have the same amount. They're being taxed kind of like as one entity because they're a married couple for federal income tax purposes. So we should line up basically the same on page one. But then down here, we don't have that other tax anymore because for social security taxes, they still kind of break it out not as though you're one entity for taxation. I think he's talking about taxation. Kind of two entities, both of them paying into social security based on your own social security number, each having their own cap. So you can see how these... The tax law, like many laws, but in particular tax law, gets fairly easy rules start to be complex when you start to compound those rules in a more complicated return. Because then you start seeing how the rules mix together with the other rules and that's when things get messy. So it's usually the fact that there's no one kind of law that's difficult. It's not hard to do the progressive tax system calculation, but when you combine the progressive tax calculation to a different rate for capital gains tax and passive income and dividends and whatnot, then it becomes complicated. The progressive tax is actually complicated in and of itself. But when you add all that other stuff, it starts to get messy. If you add multiple... It's a pretty straightforward type of calculation, but if you add multiple different W-2 forms and multiple different people in a household and that kind of stuff, then again, it gets kind of messy fairly quickly. So that's the nature of it. We'll run examples to see that and we'll continue to do so in future presentations.


So these past couple of weeks, me and Shana put out a good amount of videos talking about Spotify, from how to find Spotify playlist, why Spotify isn't necessarily the most successful thing, tools that you can use to find Spotify playlist. And the one common question that has come up under all of those videos is how do I know if the playlist are fake? How can I tell if I'm placing myself in a body playlist or a fake playlist and how can I protect myself from the great Spotify purge that seems to happen every other year or so? So that's exactly what this video is going to be about, how you can audit Spotify playlist to make sure you're getting the best quality playlist possible. Let's get into it. What's going on? My name is Colby music marketer and co-founder country brand agency. And today what I want to talk to you about is how you can audit Spotify playlist. Now I can't deny it. You know, I personally don't really like using Spotify playlist. I have my qualms, you know what I'm saying? I have my issues with them, but I can't knock that in the right hands and in the right playlist.  Now the problem that has arisen with the whole playlist industry is that there are a lot of people who see it as an easy lick off for artists. They go create body playlist and scam you with fake streams or even worse. They go create playlist that have fake followers and you don't get any streams at all.  You know what I'm saying?  I've been there. Other markets been there. You guys are not alone. Trust me. So I have developed an audit method to give me a certain level of peace of mind to know if a playlist is fake or not. Now I'm going to just go ahead and preface it. There is no 100% way to tell if a playlist is fake or not. There is no tools. There's no software. Spotify will not open up. It's API enough for people to be able to build things to be able to tell. So right now the things I'm going to talk about are really mostly based off of gut decision and a couple of analysts that you can look at to help strengthen their gut decision. But at the end of the day, you really won't know until you get into the place and see a couple of back end things. So I just had to put it out there. But before we get into all that, come and follow me on Instagram and TikTok. Links will be in the description below. Come talk to me, come engage with me, come give me some video ideas, all that good stuff. Now that they've been said, let's go ahead and get into it. All right, cool. So let's break down the scenario, right? You found your playlist. Maybe you use one of the tools I talked about, one of the methods that we talked about finding playlist or the find playlist, and you have a good list of playlists that you think might be a good fit, right? You like the way they look. You like the list, the curation of it, and you think that you make sense for it. But now you want to make sure that these playlists are actually actually legit, right? So what can you do to run this playlist through an audit process? So the first thing that I tend to do is to ask the curator for proof of marketing for the playlist or how they're growing the playlist. Like I'll blatantly ask them like, Hey, how are you growing the playlist? Are you running ads? Are you using influencers to shout it out? Are you posting about it on an Instagram account? Like, what are you doing to grow this playlist? And if they tell me I'm running ads, I'm using influencers, I'm doing whatever, I immediately ask them for proof. I say, Hey, can I see a screenshot of your ad? Or can I see one of the influencer posts? Or even sometimes, like, can I see some back in analytics from the things that you're doing to grow your playlist? Now, some playlists curators would say no.  If they're not willing to prove to me that they're actually doing the things that they said they're doing, I'm not giving you my money. You know what I'm saying? Plain and simple as that. Because usually the ones that are legit and are actually doing the things that they say they're doing to grow your their playlist will gladly provide you with info to show you that, you know, these players curators are salesmen at the end of the day. And any good sales person is going to give you as much information as you need to be comfortable with the buying process. I view playlists and there's no different way. You know what I'm saying?  Well, I'm going over to the Facebook ad archive and looking it up myself. And if I don't see anything, I'm calling Cal, you know what I'm saying? I'm out and I'm taking my money elsewhere. So that's literally one of the first things that you can do to all the playlists is just straight up ask the curator.  Can you tell me how you've been growing it? And can you provide me with some proof? And if you can give me that, you know what I'm saying? We can make business happen by the end of this day or whenever you want to make business happen. But it literally starts there. Ask them and ask them for proof. Another thing that I would recommend that you do is ask other artists that have been in the playlist with their experience has been like being in that playlist. Now from my personal experience, most artists would gladly help another artist or another person not get scammed if they themselves also feel like they have been scammed. So you can go through the playlist, find another artist that doesn't seem like they're too inaccessible, you know, maybe an artist that has only a couple of hundred or thousand followers on Instagram or Twitter or something like that. Someone that you can DM and get a conversation going. And then just ask them say, Hey, I noticed that you've been placed in chill rap 2021 for the last three weeks. What's your experience been like? I've talked to the curator myself. I'm thinking about getting myself placed and I would love to get an extra set of opinion on what it's been like since they've been in it. And once again, most artists will gladly tell you like, Hey, it's been great. I love it. My streams have went up by this much and they seem real. People have been saving and getting or they'll say, Hey, man, it really hasn't been worth it. You know, I went up a couple thousand streams without having got any playlist as I haven't got any saves. I'm scared it might be a scam. Now you also have to take this with a grain of salt, because sometimes people's songs just don't perform as well in the place as other people's song. But if you reach out to enough people in their place and you start to get the same consensus, right? Like you reach out to five artists and four of them tell you that it hasn't been worth it. Then chances are you're dealing with a place that's not worth it, you know, because once again, most artists aren't going to lie about that. They're going to gladly give you information to save yourself if they can, unless they're just salty or something like that. Literally, it starts there. Ask other artists in the playlist. What has your experience been like being in this playlist? Let them give you the experience and then internalize that and use it to strengthen your gut decision on whether you should go with it or whether or not you shouldn't go with it. The last thing that I do to our playlist is I use a tool called chart metric to look at the playlist growth history over the last week, two weeks and then 30 days. And I've talked about chart metric before. It's this data analysis tool that was created for A&Rs and marketers like myself.   It's enough to do this auditing process. And once again, the auditing process is this, this is probably one of the more powerful things in the auditing process. So I want to jump into chart metric and actually show you what it is that I look for and what I look at. So here we are inside of chart metric. Once again, the website is chartmetric.com, chartmetric.io. You can make a free version to get this. I'm currently using the paid version, you know what I'm saying? We got like that. But the free version will get this job done and will be enough for you to audit your playlist. So what you want to do is you want to find the playlist that you're trying to search and audit, copy their playlist link and then copy it over here into the search bar in the top right. Though I wouldn't found like some rap playlist, I just searched rap on Spotify and went to the first rap playlist I saw. And that's what I'm going to use for this example. This one right here, rap bangers only. So once it loads up, it should bring you to this information screen about the playlist. So it has the bio that they have on Spotify, how many tracks are in the song, the total amount of players, followers and all this stuff. So what I do is I come down to the follower chart and look at their growth history for the last couple of, last couple of weeks to last 30 days or so. Right now I have it set to the last month. So what you want to look for is inconsistencies in their growth pattern. So like this one, this one looks legit. Like I would trust this playlist because as you can see, it's been on a pretty consistent uptrend for the last couple of weeks or so. It hasn't been any major spikes or any major dips. What you're looking for are suspicious increases in followers and then suspicious decreases in followers. I'm going to find a playlist in a second to show you what I'm talking about. But basically what you're looking for is a really sharp incline that doesn't make sense or really sharp decline that also doesn't make sense because these things indicate that either the curator has bought followers and that's why they got so many followers or their Spotify playlists have been purged by Spotify itself. And it's why they lost so many followers over the duration of that time. Also, you see how like this playlist career has been growing on an average of about 60 to 80 followers a day. If it like spiked to like 2,000 followers a day out of nowhere and then dropped back down, I would either A, assume that maybe the player's curator caught like a viral moment around some content and then I would go back to step one and ask them like, Hey, I noticed that on this day, you just happened to gain 2,000 followers out of nowhere. Like, do you know what happened? And if they don't, I would assume that they bought fake followers. So let me find a playlist that better iterates this example because this is actually a good example of a good growth chart on a playlist. So here's an example of a playlist that I found really quickly that is already giving me sketch vibes. So it's called Rap Caviar 2021. And if you come down to its growth chart, look at the inconsistencies in this growth chart, right? So it's going what out of nowhere it goes from doing about 27 followers a day to five to jumping up 5,000 back to one to 3,000. Then it sharply declines about 43,000 followers, starts to go back up, starts to go back up, goes down again, goes down, declines another 16,000 followers. And then I don't know where it gains with 100,000 followers over the course of a day. So this playlist is probably a scam playlist. Like, I don't know. I don't know these people I can 100% say, but all I know is I wouldn't give them my money, you know what I'm saying? Because this is already giving me red flag vibes. So it's not always going to be as dramatic as this. Sometimes it'll be a little dip, you know, but dips aren't always a bad indicator. Sometimes like things do happen, people do leave stuff, sometimes playlist curators get viral moments, a celebrity shares it or something like that. But when is this extreme? Like, come on, man, like you've been losing all these followers these days, you just gained 100,000 followers out of nowhere. That means they bought fake followers for the players or something like that. So what you're looking for is really dramatic increases or decreases in playlist followings using this chart metric tool that once again won't give you 100% peace of mind, but it usually points you in the right direction. Because even if a player's curator does have legit traffic on the playlist, if they're buying fake followers, you want to stay away from that anyway. Because even if, you know, if they have 100,000 followers and it has a thousand real people in it, that doesn't matter because it's going to be overshadowed by the other thousands of people that aren't real. And that's going to just mess things up. So use this. This is the last way that I use to audit playlist. Once I've talked to the curator and asked them all my questions, once I've reached out to artists that have been the influences, I come over to chart metric, look at that growth history. And I use that to put all my gut decisions together and go either yay or nay. You know what I'm saying? Either here you can have the bread, we can make this work or not. I'm gonna have to, you know, take my services somewhere else. Definitely check out the chart metric website and make this an integral part of your process. If you're using playlists, if you're using plays to market yourself and market your music. So there it is guys, those are my tips on how you can best out of the Spotify playlist. Once again, there is no 100% full proof way to 100% tell us if a place is fake or not until Spotify opens up his API completely and allows other developers to make a tool that can tell the type of stuff. Then we're pretty much left with these, these gut instincts that we have based off of the information that we gathered through asking the curators through talking to other artists in the playlist and then through our chart metric analysis that we've done ourselves. So put all those things together. Once again, use it to strengthen that gut feeling. Go with what your gut tells you. If you feel like it's worth it, go for it. If you don't feel like it's worth it, save your money, put it in something else because really you won't be able to 100% tell until the song gets into the playlist. And once it's in the playlist, you can tell if it's fake or not by if your saves are going up, if your playlist are going up and all that stuff. If all you're doing is getting streams with your saves and your playlists aren't going up, then either you're in a fake playlist or the song is bad and doesn't fit their playlist. If you're in a playlist and all those things are going up, your saves are going up, your followers are going up, your playlist ads are going up and the streams are going up, then it's a pretty solid playlist. You can stick with it. You can trust that curator and you can keep things going. Now I'm curious to know what you guys have been doing for those of you that have been doing playlists around yourselves. How do you audit playlists? Do you talk to the curators? Do you have another method? Drop that in the description below. I'm sure we love to hear about it. You know what I'm saying? Each one teach one. Let's all grow together. Other than that, if you feel like you learned anything today, please like and share this video. Hit those post notifications as well as I wouldn't want you guys to miss anything. Once again, my name is Kory and I'll see y'all next time.


First Minister on the fiscal framework. We are now moving to the next item of business, which is a debate on motion number 15694 in the name of John Swinney on the Land and Buildings Transaction Tax Amendment Scotland Bill. Members should leave the chamber, should do so quickly and quietly, and those who want to take part in the debate should press a request-to-speak button now, and I'll give just a few seconds for the room to clear. I'm pleased to open the debate on the general principles of the Land and Buildings Transaction Tax Amendment Scotland Bill, which I introduced to Parliament on the 27th of January this year. I'd like to begin by thanking all those who gave evidence, written and oral to the Finance Committee, and those such as the Law Society of Scotland and Revenue Scotland, who have given and are continuing to give freely of their time to work collaboratively with the bill team to resolve some of the more thorny technical matters and to ensure, as far as practical, a smooth implementation of this bill. I'm grateful to the convener and members of the Finance Committee for their scrutiny of the bill at stage 1, and particularly for committee members' co-operation in working to an expedited timetable for this bill. I welcome the committee's support for the general principles of the bill. In light of the expedited bill timetable, I wrote yesterday to the convener of the Finance Committee, setting out the Scottish Government's response to the committee's stage 1 report on this bill, and I hope that it was helpful to members to have that response in advance of the debate today. The Land and Buildings Transaction Tax Amendment Scotland bill introduces a 3 per cent land and buildings transaction tax supplement payable on the purchase of additional dwellings, such as buy to let or second homes. Subject to parliamentary approval, that means that, from 1 April 2016, anyone buying a residential property in Scotland of £40,000 and above, who already owns a residential property here or anywhere in the world, will pay an additional 3 per cent land and buildings transaction tax on the whole purchase price of the property unless they are simply replacing their existing main residence. The Scottish Government wishes to maximise the opportunities for first-time buyers to get a foot on the property ladder in Scotland. The bill will counteract the potential distortive effect of a new stamp duty land tax, higher rate of tax being brought in in the rest of the United Kingdom from 1 April 2016. Without a land and buildings transaction tax supplement, it is likely that the stamp duty land tax, higher rate of tax, would make it relatively more attractive for investors to buy up homes in Scotland, particularly at the lower end of the market, thus increasing the competition for first-time buyers and the danger of undermining the policy objectives of the Scottish Government in that respect. The motivation of the Government has been clearly expressed to deal with circumstances that we believe are made more likely by the tax changes that are made in the rest of the United Kingdom. I am aware from the evidence presented to the finance committee during their stage 1 scrutiny of the bill that some stakeholders have expressed disappointment at the 3 per cent supplement applying to the whole purchase price and view that as a return to a form of slab tax, which prevailed in the former stamp duty land tax that existed in Scotland. As I have indicated already, the Scottish Government wishes to do all that it can to empower first-time buyers to purchase their first home. The rationale for applying the supplement to the whole purchase price is that it will impose a greater tax charge on purchases of additional property at lower value transactions. That is where the demand for properties for investment purchases or holiday homes could make it difficult for first-time buyers to enter the market to purchase a main residence. For example, someone buying a property as their main residence for £100,000 will not pay any land and buildings transaction tax, but someone buying the same property for an investment or a second home will pay £3,000. As I indicated in my draft budget statement last December, the supplement is estimated to raise between £17 million and £29 million in 2016-17, after taking account of behavioural effects, including any impact on underlying LBT revenues. The Scottish Fiscal Commission has endorsed the estimate as reasonable, recognising the uncertainties posed by the lack of Scottish data on those types of transactions. In estimating the revenues—I discussed those issues with the finance committee in our earlier discussions on that point—the Government has erd on the side of caution in estimating the volume of revenues that could arise from the tax change that is being made, given the fact that there could be behavioural implications of the application of this particular tax charge. The Scottish Government considers the housing system should cater for a variety of needs and demands across all tenures. I recognise the need to balance support for home ownership and first-time buyers without discouraging significant and beneficial investment in residential property for rent. The Scottish Government has been supporting the purpose-built private rented sector since 2013, funding both the building of the rented sector study and a dedicated private rented sector champion, tasked with ensuring that action is taken to boost the supply of high-quality private rented sector homes at scale. After reviewing and reflecting on the stage 1 evidence, I am pleased to say that the Scottish Government concurs with the finance committee's stage 1 report recommendation that provision should be made within the bill for a relief from land and buildings transaction tax supplement for buyers purchasing six or more residential properties in one transaction. The Scottish Government intends to bring forward a stage 2 amendment to give effect to this particular issue. On the issue of reliefs in general, I note from reviewing the stage 1 evidence that there are suggestions for a variety of reliefs from the supplement. The Scottish Government recognises that the housing market changes over time and where practical and affordable wishes to do what it can to create sound sustainable market conditions. However, as with the land and buildings transaction tax system, I am firmly of the view that a period of time will be required to enable the land and buildings transaction tax supplement to become embedded and for sufficient financial and statistical data to be collected to enable informed policy decisions to be made in the future. The position on reliefs with particular reference to the land and buildings transaction tax supplement will be kept under review as part of the on-going process of devolved tax planning and management. However, I hope that the specific relief that I have set out in relation to the bulk purchase of properties gives some further clarity to the marketplace and can enable commitments to be made with the assurance that I have given. When I gave oral evidence before the finance committee, I did not close the door on implementing a grace period for transactions. I have carefully reviewed the stage 1 evidence and considered further helpful input from the Law Society of Scotland and Revenue Scotland. I am not convinced of the strength of that evidence as yet, but I do not want to entirely close the door on implementing a grace period. The approach that I have elected to take here is to ask Revenue Scotland to monitor the position between the LBTT supplement provisions coming into force on 30 October 2016. The data collected will enable the Scottish Government to take an informed view as to the need or otherwise of a grace period and what a grace period should be. Existing provisions in the legislation enable individuals to essentially claw back charges that may have been applied over an 18-month period. I hope that that provides sufficient reassurance to Parliament, but I reiterate the point that I remain open to considering those points in due course. I am aware that a number of stakeholders have called for an early and comprehensive review of the impact of the supplement. I welcome the finance committee's comments in their stage 1 report that developing an understanding of the impact of the supplement will be complex and take time a view with which I concur. I consider that reviewing the impact of the supplement will require at least one complete year of data, given the seasonality in housing transactions, the likely for stalling behaviours and the longer-term trends in the housing market. The Scottish Government intends to update Parliament on the outcome of that review in the 2018-19 draft budget, in accordance with our undertaking in the written agreement on the budget process, to provide a commentary on out-turn figures for the devolved taxes for the most recent year, including any variance between out-turn and forecast. As currently drafted, the bill proposes that the supplement does not apply to the purchase of a residential property where missives have been concluded before 16 December 2015, the date of the Scottish draft budget statement, even when the transaction did not settle until after 1 April 2016. Where the missives for the transaction have been concluded on or after 16 December 2015, the supplement has been proposed to apply if the transaction settles on or after 1 April 2016. The Scottish Government has listened carefully to the stakeholder community and intends to bring forward an amendment at stage 2 whereby the supplement will not apply to the purchase of a residential property where missives have been concluded before 28 January 2016, but the transaction does not settle until on or after 1 April 2016. I believe that this adjustment delivers a fairer result for buyers who may have been putting in offers for property or making reservations for new-build property in the period before the detail of the proposed supplement was in the public domain when the bill and the accompanying documents were published on the Scottish Parliament's website. I move that Parliament agrees to the general principles of the Land and Buildings Transaction Tax Amendment Scotland Bill. I now call on Kenneth Gibson to speak on behalf of the Finance Committee seven minutes. Thank you, Presiding Officer. It is with pleasure that I speak on behalf of the Finance Committee in this stage 1 debate on the Land and Buildings Transaction Tax Amendment Scotland Bill. I thank Finance Committee members, the clerks and those who gave evidence to help us to reach our deliberations expeditiously, along with their adviser Professor MacEwn, who produced an excellent summary of the responses whilst working to a particularly tight deadline. Following publication of the UK Open statement in which the Chancellor set out plans to introduce a 3 per cent stamp duty land tax supplement on the purchase of additional homes from 1 April, the Scottish Government set out similar proposals in its draft budget. The Government has emphasised the need to introduce a supplement at the same time as it comes into force in England Wales to mitigate the risk of any related impact on the Scottish property market. That meant that the usual consultation process could not be undertaken and standing orders were suspended to facilitate a truncated timetable for parliamentary consideration of the bill. Whilst the committee noticed that those circumstances were far from ideal, we recognised the reasons behind them and accepted that there must be an element of flexibility in the scrutiny arrangements. In essence, there is a need to balance the risk of not responding immediately to UK tax changes with the risk of unintended consequences from enacting legislation without first conducting full consultation and comprehensive parliamentary scrutiny. The need to achieve such a balance is clearly an issue of real importance to Scotland's public finances and one that may arise more frequently in the future. We intend to reflect carefully on this before setting out recommendations on how best to balance priorities in our legacy report. We wish that our own will be short of the usual consultation exercise and received over 50 responses ranging from professional bodies to individuals concerned about the bill's potential impact on their own property dealings. We then took evidence from a range of stakeholders before hearing from the Deputy First Minister. Turning to the bill's policy objectives, the key intention is to ameliorate any potential market distortions arising from the proposed UK supplement that should impact in particular on first-time buyers. Concerns were raised by some stakeholders that no impact assessment had been undertaken and there was a lack of data on the Scottish second home and biotelect markets. We therefore recommend that the Government commission's research and take steps to improve the level of data available in those areas. Ministers closely monitor the supplement's impact on the housing market and conduct a comprehensive review once sufficient information is available. Following on from that, we also recommend that the Scottish Fiscal Commission should provide a commentary in the first six months of the supplement's operation, including the impact of first stalling by the end of November. I note that today, the Deputy First Minister is suggesting that one full-year data would be more appropriate, and that is something that we will deliberate on. We had mixed views on the policies that likely impact on first-time buyers, with concerns expressed that the supplement would act as a deterrent to investment in new housing developments. Others suggested that whether a supplement not introduced to investors from outside Scotland could push up property prices. Whilst recognising the Government's policy intentions regarding first-time buyers, the committee was also conscious of the need to protect housing supply for those who rent their homes early through choice or necessity. We heard that the vast majority of landlords own fewer than five homes, with large numbers owning just a single biotelect property. Concerns were raised that not only could the supplement deter investment in housing, it may simply result in additional costs being passed on to tenants via higher rents. Again, we consider it essential that the Government closely monitors the supplement's impact on rent levels, particularly in areas where rents are already high. To mitigate the possible deterrent effect on investment in Scotland's housing stock, numerous reliefs were suggested by stakeholders. Unfortunately, it was not possible for us to scrutinise every proposal in the time available, and we remain conscious that exemptions and reliefs have the potential to provide loopholes and opportunities for tax avoidance, with which we therefore invite the Government to comment on the stakeholder's suggestions. The committee was convinced of the case for introducing certain specific reliefs for registered social landlords, local authorities and student halls of residence. Not only is availability of quality affordable housing for those on lower incomes a key challenge facing Scotland, we also heard that many local authorities and registered social landlords have engaged in significant house purchase activity. That has helped to support the construction industry during the period of recent market recovery in respect of student halls of residence. It is clear that they are designed such that they are unsuitable for anyone seeking to buy a home. We therefore recommend that reliefs should be introduced for both types of properties, and that should mirror those reliefs provided for in the original LBTT act. Another proposed relief that she supports is for larger-scale investors purchasing six properties or more. That was suggested by numerous professional bodies and is consistent with the provisions of the original LBTT act, which states that we are six or more dwellings at the subject of a single transaction, then they are treated the same as non-residential property for tax purposes. The UK Government consultation seeks views on reliefs for bulk property purchases, and we are mindful that the provision of such relief south of the border, but not here, could adversely affect investment in the Scottish market. Furthermore, we consider it unlikely that such a relief would cover small-scale investors who are more likely to be in direct competition with first-time buyers to purchase existing properties. Nevertheless, we remain mindful that the relief might need to be reviewed if there are signs of a negative impact on the number of new housing developments due to a decrease in the number of buy-to-let properties being purchased by smaller investors. We are also clear that a grace period should be provided to cover unintended circumstances where our purchases are made temporarily on two properties simultaneously as a result of a sale being delayed or falling through. I am pleased that the Government has confirmed its intention to amend the bill to introduce those reliefs and look forward to discussing them further with the Deputy First Minister in next week's stage 2 proceedings. In conclusion, the committee supports the general principles of the bill, but remains conscious that, although the proposed supplement may appear relatively straightforward, a number of potentially complex issues remain, which will require careful consideration at stages 2 and 3. In particular, there is a need to ensure that appropriate reliefs are introduced, which balance the needs of first-time buyers with those who rent their home and with the interests of housebuilders and investors. That will not be easy, especially given the lack of sufficient data on the current structure of the housing market in Scotland. It is therefore essential that the impact of the bill is closely monitored and a comprehensive review carried out once sufficient data is available. I look forward to considering those important issues further at stage 2 and hearing the contributions of other members to this debate. I welcome much of what the cabinet secretary had to say in his speech and his recognition of the finance committee's recommendations and the concerns expressed by stakeholders. I think that it is important to take a step back and consider the context, because land and building transaction tax was levied for the first time last year. When the cabinet secretary set out his comprehensive plans for the tax, well over a year ago now, it was a matter of a couple of months before he had to think again and bring new proposals back to the Parliament to respond to George Osborne's proposals for stamp duty land tax. Whilst I would observe that it was probably the fastest change of policy in history, I understand that the cabinet secretary's desire to have a similar fiscal position in Scotland, as it is with the rest of the UK. However, now we are presented with the land and building transaction tax supplement, and yes, it was indeed the self-same chancellor, George Osborne, that introduced that in his autumn statement. A new 3 per cent supplement for stamp duty land tax, and the cabinet secretary moved quickly to copy that. Now we have a land and buildings transaction tax supplement on purchases of additional residential properties at 3 per cent for those transactions over £40,000. I know and accept that there are very strong arguments for us to have the same fiscal regime north and south of the border. Our housing markets are incredibly similar. They can and will be influenced by each other, but there are times that we might choose to do things differently. There are obviously times when we want to respond very quickly so that behavioural responses to tax changes are minimised. That has implications for consultation with stakeholders. It has implications for scrutiny by this Parliament. I know that it has not been an entirely satisfactory process for stakeholders, or indeed for members of the finance committee, because of the speed at which things have been done. I do hope that the Government and the Finance Committee will consider that in the future so that we get the balance right. I think that is something that we want to return to, because I can see circumstances in the future of that happening time and time again. I do not think that any of us wants to see a situation where speed means bad legislation with unintended consequences. In that context, let me draw members' attention to the House of Commons Treasury Committee report. It is not something that I read often, but it is now going on my list. I think that it is fair to say that it is not enamoured at all with the Stamp duty land tax supplement. There is a very strong suggestion coming from it. There should be no rush to implementation because of the complexity and because of the possibility of unintended consequences. It would also feel that it would be detrimental to the buy-to-let property market and recognise the importance of this sector for labour mobility. I want to return to that point in a minute. I am not sure, and I do not know whether the Deputy First Minister is any clearer than I am, if there is any possibility that George Osborne might delay implementation or, indeed, substantially change the proposal. For me, that raises interesting questions. Given that the Scottish Government has aligned themselves with the proposal from the UK Government, does that mean that the introduction will be delayed in Scotland if it is delayed in the rest of the UK? Or does the Deputy First Minister intend to proceed regardless? Perhaps it provides us an opportunity to think that through, but, in any event, we need stability and certainty and not chop and change. There are real issues that I know will be grappled with by the Government, but we will decide on the Scottish budget for 2016-17 tomorrow. Assumptions have been made about the revenue that will be generated by this supplement. We will have no idea, though, what the posture of the UK Government is going to be to the Treasury Committee report until at least mid-march is my understanding. I thank the member for giving way. I just wonder if she would accept that this is a good method to protect local people from second-hand, second-home owners. I do, and if you were unclear about that, let me apologise to the member. I do absolutely accept that, but there are unintended consequences that we should be alive to, and not simply just look narrowly at the principle and nothing else. There are wider questions, and there are issues that need to be addressed in the legislation before us. Areas for exemption that the Scottish Government has said that it will think about further and come back to the committee at stages 2 and 3. Let me consider just a couple of those areas. There are many more. The committee spilled those out in pages and pages of possible reliefs. The Scottish Government has a laudable intention of attracting new skilled workers to Scotland. Will any such person, who is perhaps a homeowner abroad and who wants to buy a home here, be liable for the additional 3 per cent? If that is the case, I do not think that that sends out the message that you want that we would welcome those with skills that we need to this country. How will ownership abroad be identified and that additional tax be enforced? Alternatively, Scots, who aspire to maybe have a second home abroad, will be liable for 3 per cent of the purchase price. I think that the answer is yes. I think that it could well be unpopular. However, how would you check it? How would you enforce it? So it is the practical implementation. That woman's name remains on the ownership of the house she leaves. Will she be liable for the additional 3 per cent? If a person who is a homeowner purchases a half steak and a flat, valued at £75,000, will she be liable for 3 per cent of £75,000, 3 per cent of £37,500, or not liable at all? I do not suggest that there is a complexity here that we need to understand. In a short period of time, I wonder whether we would not arrive at unintended consequences. Finally, let me turn to the revenue that it is likely to raise. I think that it is fair to say that the amount raised with residential LBTT is less than expected. We have nine months of outturned data so far, but the modelling of behavioural impacts is critical. LBTT's supplement has benefited from more assessment, but the Scottish Government keeps telling us that there is limited availability of data. We clearly need more. We want to know how you are doing your forecasting methodology. The yield was anticipated at £45 million to £70 million. It has been revised down quite dramatically to £17 million and £29 million. If that is simply a tax to generate more income, then it is a very inefficient way of doing it. The House of Commons Treasury Committee might have got that right, and we should proceed with less haste, but I recognise the dilemma for the Scottish Government, so we will support the general principles of the bill at decision time. Thank you. I now call on Gavin Brown. Five minutes, Mr Brown. It certainly appears clearly to me that both north and south of the border that this measure is far more complex than first appeared when it was announced in the autumn statement. I have the voice of former Minister Jim Maither ringing in my ears as I have reviewed this piece of legislation. Mr Maither once said to me, Gavin, there is no such thing as unintended consequences. There is only lazy thinking. That had an impact on me then and has done since that particular time. Presiding Officer, I think that, ultimately, having thought carefully about the piece of legislation, it is my view that the risk of inaction is greater than the risk of unintended consequences flowing from legislative action. On that basis, I was prepared to support it at the committee stage. We will vote in favour of the principles of the legislation come decision time to date. That said, Presiding Officer, there are clearly significant issues to resolve and I think that the Government would accept that. However, I would say in passing if the UK Government were to decide to delay the legislation south of the border and I have no inside information on that, but if they were to do so, I do think that we should give serious consideration to doing so as well. And Mr Swinney would certainly face no criticism from this part of the chamber where that to be the case. However, I assume that it is going to pass south of the border in the current timescale and therefore my working assumption is that it will be the same here. There are risks, Presiding Officer, Kenneth Gibson captured one of them quite neatly, in that in trying to help first-time buyers we have to be very, very sure that we do not actually end up making them worse off if we see a reduction in development. One of the arguments put forward to the committee was this, that a number of developments that go ahead rely on what are called off-plan sales. So those are pre-sales made in advance of the development being built, but it is much more likely that anyone involved in a pre-sale is a buy-to-let operator or a second homeowner as opposed to somebody going for their first mortgage. Some of those developments rely on pre-sales in order to secure funding and if some of those developments do not go ahead, then there could be a greater danger of lack of supply than we currently have. And I think that as much analysis as can be done on that ought to be done. Did I hear someone once? Yeah, of course I've been waiting to Mr McDonnell. Grateful to Gavin Brown for giving way. He would of course accept though that at the committee I asked for empirical evidence to support that supposition and none was forthcoming. So while the suggestion was made there is currently no data at least none that was made available to the committee that would back it up. Gavin Brown? I mean accept Mr McDonnell makes a fair point. There wasn't empirical evidence. There was evidence from a number of witnesses. There is anecdotal evidence and I suppose that's one of the reasons why all of us on the committee certainly took the view that the government needs to do should actually commission specific research into the issue of the impact of by-to-let and second homes on the property market as a whole. And while the government so far don't seem minded to take that forward specifically, I would encourage them to do so as they work through this piece of legislation. Presiding Officer, I think that one of the issues that I welcome a number of comments that the Deputy First Minister made, particularly in relation to local authorities and RSLs, particularly in relation to large-scale investors and particularly in relation to changes to the transitional period, all of which I think are sensible and fair. I want to end my remarks or in the final minute or so that I have and perhaps in closing is to focus very strongly on the concept of the accidental second home order. The Deputy First Minister isn't minded to make changes at this stage but said that the door is not entirely closed, which I take with great satisfaction and will push hard against that door to ensure that it reopens because I think this stuck out like a sore thumb to me, Presiding Officer. The objective of the legislation quite specifically is not to capture those who are simply replacing the existing main residents but it's obvious to me that there is a severe risk that we capture a significant number of people in that category because if you have a family the family has grown perhaps and they simply want to move to a bigger house to accommodate that if they purchase that new house first and then the sale doesn't happen of their existing home on the same day whether it falls through or simply takes longer for it to happen not only do they have to get some form of bridging loan but they would be immediately liable for this 3% surcharge which could rip about to thousands upon thousands of pounds even for those who are currently out of LBTT entirely for purchases below the threshold there. So I think that's a severe risk I, my time for now is up, Presiding Officer. I'll return to this because I think it is the biggest significant weakness and one that I genuinely want to work with the Government on to get it right at stage 2. Thank you. Thank you, Mr Brown. You will have an opportunity in about four minutes' time. I now call Mark McDonald. You've got four minutes but you could maybe push it to five. Oh gosh, oh gosh. The pressure now, Presiding Officer, to give Gavin Brown time to collect his thoughts for his summing up speech and perhaps give him some content for as well, who knows. I think there are a few things that need to be highlighted and I think the committee took a great deal of evidence in a very short space of time and I think that it was very interesting some of the evidence that we did receive. Jackie Baillie spoke about if this was just a bill designed to generate more revenue. I think that that belies the fact that the genesis of this bill was firstly to ensure that there wasn't a detrimental impact as a consequence of a policy change taking place at UK level and secondly to ensure protection for first-time buyers against bi-to-let investment. I think that one of the things that I pointed out in an intervention to Gavin Brown and I think that I became slightly frustrated by during the course of the evidence taking was that an awful lot of certainty was being drawn from supposition and anecdotal evidence when there didn't seem to be a lot of hard data and empirical evidence backing it up. That made it very difficult for the committee to reach a true value judgment on some of the issues that were being raised with us by some of the witnesses who came before the committee. That's why, as Gavin Brown says, I think that the notion of getting some more data that can really be the bedrock for analysis of impacts on the housing market is absolutely critical and important. As this policy rolls out alongside LBTT itself over a period of time, once you have the opportunity to essentially bottom out for stalling effects and other variations, I think that that will then give us a better idea of impact and perhaps help us to build a slightly better picture of what is happening in relation to the housing market. In terms of reliefs, I think that the committee report and we had some discussion around how we lay it out, but the committee report goes into some great detail about the range of reliefs that have been suggested from various quarters. I think that there are a number of risks inherent with any system of relief that is brought in, that it runs the risk of creating significant loopholes which could then undermine the policy intention of the legislation. So I think that the committee has very properly asked the Scottish Government for its view on the basket of reliefs, but at the same time has focused on a couple of specific reliefs that it feels are necessary. And I think that the Deputy First Minister has responded very fairly to those suggestions. The third issue that I've sort of wrestled with and looked at is and I mentioned it in the evidence-taking committee is around the flexibility that the current process that we go through in Parliament affords to the Scottish Government. It doesn't necessarily relate specifically to this piece of legislation, but I think in general terms if we look at the flexibility that is afforded to the Scottish Government in terms of reacting to tax change or announcing tax changes versus that which is afforded to the Chancellor who can stand up at the dispatch box and announce a change that will take effect at midnight that evening should he so choose to do so. Versus the Scottish Government which under the processes that are agreed through Parliament has to essentially signal its intentions some months in advance of changes taking place and the opportunity that that process allows for behavioural change and for stalling to take place versus that which exists at Westminster I think is something that does need to be explored in more detail in future perhaps by a successor committee from the finance committee but also I think it would be welcome in the next Parliament I think to get some more thinking from the Scottish Government around that as well. I think that the main thrust of that is first and foremost that first-time buyers have to be protected in terms of the purchases that they make and I see that despite being told I could push it to five minutes I'm now being told to hurry up so I will do so Presiding Officer but one of the things I noted in terms of the intentions of LBTT when it was first introduced was to stimulate purchase at the lower end of the market and anecdotally from state agents locally in my constituency we are seeing a stimulation of the market at the lower end which was the intention so I'm confident that that is happening but I think that this is necessary a necessary measure to ensure that that is protected thank you Presiding Officer Thank you Mr Macdonald you actually got four minutes four to five seconds so you did quite well now we go to the wind-up speeches Gavin Brown four minutes Thank you it's been a fairly short debate Presiding Officer I have to say I do want to return to the issue of the accidental second home order because I genuinely think that this could be a pretty big problem and one which I think both south of the border and here it hasn't been considered anywhere near enough because we deliberately want to exclude those as we heard in the policy memorandum those who are just replacing their existing main residents so therefore people family selling their house and the sale doesn't go through it can fall for any reason it could just take longer to sell than they anticipated in both of those scenarios they of course would be liable to pay that sum of money ranging from a few hundred to potentially tens of thousands of pounds in some cases money which of course could be clawed back ultimately but money which would have to be paid up front in the first instance this in my view is wrong for a number of reasons firstly it does just seem to me unduly punitive not only are people in that scenario likely to then need some form of emergency finance or bridging loan but at the same time we add to their stress with this 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 it might result in a transaction then not going ahead which could have implications elsewhere in that housing chain because very few transactions take place in a vacuum unless it's just the first time buyer involved there are quite often chains as they're called or a number of transactions reliant upon another transaction taking place and if one of those falls because this tax having to be paid up front it takes them over the financial burden then I think it could have a wider impact on the housing market as a whole it strikes me as unduly bureaucratic Presiding Officer particularly again when the government stated intention is not to bring these people within the realms of the legislation and I suppose also that I just feel there could be a wider deterrent on the market as a whole many of us many of our constituents out there are cautious and you could end up in a scenario where people just as a matter of fact now only buy once they have sold we could end up with a market where people sell their house first and only after they have sold do they consider buying so that they make absolutely sure they're not liable for these thousands of pounds in some cases that may be the right decision but if that were to be the effect on the market place as a whole then I think it could well have a detrimental effect on the economy it could slow down parts of the housing market in a way that we don't want to and I think if we allow that to go on for six months it may take some time to write the market at some point and I think we're better to look at it more carefully now of course Revenue Scotland may prefer the option that Mr Swinney has suggested it makes it cleaner and simpler for them but I urge him in his closing speech at least to say he will speak to more of the legal profession in particular and to those who represent consumers and house buyers to get as much data as he possibly can before taking a final view on this because I'm convinced that if he does so he'll hear more strongly from a number of them that something needs to be done we heard on the committee that a grace period would be one option I certainly think that's one way of doing it though I would say the suggestion of 30 day grace period I don't think goes anywhere near far enough because if a housing sale does fall through it's pretty unlikely not impossible pretty unlikely that the average house sale will then happen in 30 days depending upon which website you look at it can take 8 weeks to 12 weeks on average to sell a house and therefore a lot of people again would be captured if the grace period were to 30 days so I urge the deputy First Minister to give serious consideration to this he has said he's not close the idea I personally would commit to working with him to try and find a solution to this because I genuinely believe our constituents going forward I wouldn't have any constituents post April Presiding Officer but I genuinely believe a number of constituents going forward would see this as a huge matter of regret and we would then have to take emergency action to deal with that and therefore I urge him to indicate he would be willing to discuss in his closing thank you thank you Mr Brown I'm not have any either come with me I'm now calling Llysa Brennan Miss Brennan's 6 minutes thank you Presiding Officer just to sum up for the labour group I think is obviously it's been a very short debate today but we have heard the key points so during the finance committee's evidence gathering session we heard from members about the state of aims of the policy to minimise market distortion in Scotland due to the inward investment from the rest of the UK if the Tories introduced this initiative and the Scottish Government considers this inward investment could cry out first time buyers I do support and we support the principles underpinning this tax to reduce rent-seeking behaviour but it cries out first time buyers from buy to let landlords or others for second time home owners the draft budget estimates that this additional dwelling supplement would raise about £23 million in the first year this sum actually equals the shortfall of Dundee City Council so if you want to ear market for Dundee City Council we really have to be with that but seriously the church institute of housing suggested using the revenue and earmarking it for housing and I would suggest that the Scottish Government ought to consider that because I read in the cabinet secretary's response about how you are trying to promote home ownership and you have got initiatives but actually if you do put the £23 million or the money raised it would obviously help more people to get into the housing I do have some concerns over the bill I think and as everybody's said it is about the lack of credible data it is largely anecdotal data and I did mention at the time about how me and colleagues were involved in the Scottish Government report baseline in the private rent sector in 2009 and one of the recommendations there was actually about improving the data and I do see actually that there's been very small improvements but I think to understand how the market works you need to understand what the motivations are for people owning more than one home and actually renting so whether it is accidental landlords or whether it's people who have inherited to property we just need to understand how the private rent sector is evolving the proportion of households in the private rent sector is obviously increased from 5% in 1999 to 14% now and obviously this expansion has been encouraged by the Scottish Government when you look at the rent increases at the Scotland level over the last year it's saying 1.6% in the private rent sector so maybe so maybe actually one of the reasons if we are concerned about market distortions a rental year if it's saying 1.6% increase it may not be as competitive as some of them are down size the registers of Scotland noted that approximately one in five purchases with a mortgage in Scotland were to first-time buyers between 2005 and 2015 but I think it's important to remain mindful of the context house price annual inflation was 5.6% in England 0.8% in Wales 2.9% in Northern Ireland and minus 9% in Scotland and that's the latest data from ons so the price of properties for first-time buyers is also increasing but at a decreasing rate so it's suggested that it's actually slowed down in the housing market so going back to I'm just a bit concerned that actually there may be unintended consequences and whether the lack of first-time buyers is actually due to supply side issues but it might also be due to demand side issues going back to just the general nature of the economy and employment Revenue Scotland is currently preparing guidance to help taxpayers and the agents understand the supplement and with respect to the implementation of the supplement it's about the concerns like what Gavin Brown has said about the accidental second home owners so I really do think that I would urge the cabinet secretary about the grace period when you think about families who buy a house and it might take a number of months to renovate it they would be affected by the supplement others as Gavin Brown said about who accidentally own a house because something else has happened in the chain or a family who's relocating from England up to Scotland for work purposes and they've bought a home in Scotland and are trying to sell their home in England but then they'll be affected by the supplement so I would really hope that the cabinet secretary I know you say you're going to take evidence over the first six months but I think actually a grace period especially given how quickly this has been implemented and I welcome your comment today saying it's going to be from the 28th of January but I think it would be I would really hope that you consider the grace period a bit further I think the questions that the cabinet secretary ought to address is what will happen if the conservative government of Westminster actually decides to delay the implementation of this tax and how confident is the cabinet secretary that this 3% supplement will change behaviour will prevent second home ownership and will prevent the crying out of first-time buyers so I look forward to hearing the cabinet secretary's comments for these questions thank you thank you Ms Brennan I now call on John Swinney to wind up the debate Deputy First Minister until 640 please thank you I'm always delighted to provide helpful advice to Jackie Baillie and I'm not sure if she was seeking advice but she did ask me of whether there would be a charge applied if one was buying a home overseas and I wasn't sure if Jackie Baillie was perhaps just looking for some advice across the chamber to enable her to undertake her financial planning perhaps perhaps for her retirement which is of course a long way off before we get to that but what I can say is that the tax charge is only chargeable if the additional home is in Scotland but if somebody who lives overseas is buying an additional home in Scotland the charge would be required to be paid in Scotland and of course they would be required by law to report that through the revenue Scotland return so an individual who is not resident here normally buying a property here would have to indicate on their return whether they owned another property somewhere else in the world and that would be part of the administration so I'm happy to provide some further advice Thank you very much Can I ask the Deputy First Minister on that basis does that mean that an incoming worker who maybe is ordinarily resident somewhere else but is buying a property in Scotland would be liable and does he think that would discourage them from coming to Scotland in the first place? Deputy First Minister If they were a home owner in another country yes, the charge would apply and of course people have to weigh up all of the differences and obviously there are many many circumstances we can apply in this debate in individual circumstances but those circumstances would apply in the scenario that Jackie Baillie raises A lot of the debate Jackie Baillie, Lizzie Brennan, Gavin Brown have all made reference to the grace period point and I want to address that in my closing remarks I am prepared to have further discussions about this point I have weighed up the evidence on this issue and I am not satisfied that the provisions of the bill does not provide sufficient flexibility to address this issue but I am very happy to have further discussions about this point either in the run-up to stage 2 or stage 3 to enable me to further consider some of the issues that are involved There is provision within the bill for ministers to bring forward a relief from the supplement of any nature so we can make provision in due course it does not require ordinarily to be undertaken as part of stage 2 or stage 3 and as I indicated I want to give a period of time for us to monitor this issue up until the 30th of October and that will give us a better impression of the issues that are involved at that stage The Jackie Baillie raised the issue of the question of a delay to the UK legislation I have no information about that point but I certainly have no intention of delaying the legislation within Scotland We have taken this decision because prompted by the decision of the United Kingdom Government because I could foresee some market distortion that could take place as a consequence but now that we have established the approach we it supports our policy approach in this respect that we wish to protect the opportunities for individuals to gain access to the property market and I think it's important that that is reflected in the bill One of the other issues that came up in the debate it was raised by the convener of the finance committee and also by Mark McDonald and that relates to some of the arrangements that we will increasingly have to consider and of course we will have to increasingly consider them ever more now that it is clear that we are going to have the powers envisaged under the Smith commission and the associated tax powers that will come from that that we have to consider in our own budgeting and financial process how we undertake the any changes timeous changes to our legislation to ensure that we have appropriate tax arrangements in place I can't pretend that it is ideal that we've undertaken these changes in such a short time scale but we have given them a lot of thought and I am committed in the course of stage 2 and stage 3 to further consideration on the points of detail to ensure that we cover any of the circumstances and scenarios that may arise that require us to make any further provision to this legislation but I am confident that the Government has listened carefully to the feedback of stakeholders to ensure that we're properly prepared and equipped to address any further issues but I do think it would be helpful for the Government and the incoming Government after the election in May to have the benefit of some reflections from the finance committee on what the processes and procedures of Parliament may be like to ensure that we can undertake this type of process of scrutiny in as effective a way as we possibly can do. Mark McDonald also talked about the wider questions of reliefs that would be envisaged under this legislation. I have set out some of my thinking and I am committed to reflecting further on that as the bill takes its course through Parliament. Jackie Baillie also raised a number of points and scenarios about the detail and about the complexity of the legislation. I accept the fact that there is complexity in the legislation but I think that it's incumbent on the approach of the Government to make sure that we explore as many of those scenarios as we can and I'm satisfied that we have the process in place to enable that to be the case. Finally, Presiding Officer, mentioned what was made during the debate about the revenue estimates that the Government has made. We have essentially headline estimates of between £45 million and £70 million of expected revenue from this supplement. I have settled on a scenario of £23 million which is a mid-range estimate that takes into account the effects of forstalling and also the effects of behavioural changes as a consequence. I believe that it is a prudent assessment for the Government to have made and one that is relevant to the budget process that we have set out. So I'm... I reaffirm to Parliament the willingness of the Government to engage in detailed scrutiny on those questions and to ensure that the issues raised with us by stakeholders are fully and adequately addressed as we take the bill through its remaining stages. Thank you, Deputy First Minister. That concludes the debate on stage one of the land and buildings transaction tax amendment Scotland bill. We now move to next item of business which is consideration of motion number 15563 in the name of John Swinney on the financial resolution for the land and buildings transaction tax amendment Scotland bill. I call John Swinney to move the motion. Move, Presiding Officer. The motion will be put decision time to which we now come. There are seven questions to be put as a result of today's business. The first question is motion number 15645 in the name of Christine Grahame on Scotland's national action plan for human rights be agreed to are we all agreed the motion is therefore agreed to the next question is amendment number 15695.3 in the name of Claire Baker which seeks to amend motion number 15695 in the name of Fiona Hyslop on the BBC charter renewal process be agreed to are we all agreed the amendment is therefore agreed to the next question is amendment number 15695.1 in the name of Liz Smith which seeks to amend motion number 15695 in the name of Fiona Hyslop on the BBC charter renewal process be agreed to are we all agreed the amendment is therefore agreed to the next question is amendment number 15695.2 in the name of Liam McArthur which seeks to amend motion number 15695 in the name of Fiona Hyslop on the BBC charter renewal process be agreed to are we all agreed the Parliament is not agreed we move to vote members should cast their votes now the result of the vote on amendment number 15695.2 in the name of Liam McArthur is as follows yes 34 no 65 there were no abstentions the amendment is therefore not agreed to the next question is it motion number 15695 in the name of Fiona Hyslop as amended on the BBC charter renewal process be agreed to are we all agreed the motion is therefore agreed to the next question is it motion number 15694 in the name of John Swinney on the Land and Buildings Transaction Tax amendment Scotland. be agreed to their next question is it motion number 15563 in the name of John Swinney on the financial resolution for the land and Wrth hyn ymwysilwch, rydyn ni'n amgylchedd. Felly mae'n ddwybod i'r ddullustiol. Felly mae'n ddigonwch am ei wneud. Mae'r ddweud i'r ddweud o'r cymdeithasol, rydyn ni'n ddweud o'r ddweud o'r cymdeithasol.