Draft regulations allowing local authorities to charge up to double the full rate of council tax on second homes have been laid before the Scottish Parliament.
Second homes are currently subject to a default 50 per cent discount on council tax, however, local authorities can vary their charges and many already charge second home-owners the full rate.
In North Ayrshire, second home owners can receive a 50 per cent discount or a 10 per cent discount on an unoccupied, but furnished, property which is not in use as a holiday home.
If approved, local authorities would be able to apply the council tax premium on homes not used as a main residence.
The issue is particularly topical on Arran, with many villages having a high number of second homes. In some areas, such as Corrie, there are more holiday homes than year round residents.
Proponents for higher taxation on second homes believe higher council tax may free up some of the housing stock for island residents and that it will help to keep house prices lower by disincentivizing second home ownership.
The proposed changes to the law were welcomed by the Convention of Scottish Local Authorities (COSLA) which approved of a second home premium as it will bring second homes into line with long-term empty homes from April 1 2024.
Across Scotland, empty homes are currently charged a 200 per cent premium if unoccupied and substantially unfurnished for a year. This is to encourage owners to bring empty properties back into use.
COSLA resources spokesperson councillor Katie Hagmann said: “Subject to Parliamentary approval, COSLA very much welcomes the ability for councils to take the decision to increase the premium on second homes in their areas. Allowing the politicians who are closest to their communities to take decisions about what best suits local needs and circumstances is well aligned to the Verity House Agreement.”
Public finance minister Tom Arthur said: “We want everyone in Scotland to have a home that meets their needs. We know second homes can sometimes benefit local communities, but they can also restrict the availability of housing and increase costs for people who want to rent or buy.
“Subject to approval by Parliament, this legislation aims to prioritise housing for living in by allowing local authorities to charge a council tax premium on second homes. Backed by a majority of respondents to our joint consultation with COSLA, it will enable councils to seek a fair contribution towards local services from second-home owners.”
If the draft proposal is approved and makes its way to legislation in the 2024-25 financial year, it will be based on rates from 2023-24 and will affect approximately 24,287 second home owners in Scotland.
Public finance minister Tom Arthur. No_B46counciltax01_23_Tom_Arthur