In its submission of evidence to the government’s consultation, the professional body said “paying ADS is not a good use of funds that should be used to maximise affordable housing supply”.

The ADS came into force in Scotland from 1 April 2016 and is a charge added to LBTT when an additional residential dwelling with a value of £40,000 or more is purchased, for example as a second home, holiday home, or rental property. ADS is currently set at six per cent of the total purchase price (with some exemptions and reliefs).

The ADS was introduced to protect and support opportunities for first time buyers. When it was introduced, the legislation exempted registered social landlords (RSLs) from the charge, but local authorities were overlooked. This has meant that in some cases, local authorities making strategic acquisitions to add to affordable housing supply have incurred additional expenses.

Following consultation, the Scottish Government is now seeking to amend legislation to relieve local authorities of the additional charge for affordable housing acquisitions.

Ashley Campbell, CIH Scotland’s policy and practice manager, said: “We welcome the Scottish Government’s commitment to end additional LBTT charges for local authorities acquiring homes ‘off the shelf’. We need to urgently increase the supply of affordable housing to tackle homelessness and meet wider housing need. As budgets remain challenging, it is more important than ever to get the maximum return from investment, ensuring that every penny goes towards increasing social and affordable housing supply, not paying unnecessary additional expenses.”