Council tax for second and empty homes, and thresholds for non-domestic rates: consultation analysis

6: Other issues raised

Question 25 – Is there anything else you would like to tell us in relation to this consultation?

Around 465 respondents made further comments, often reiterating points discussed across previous sections of this report, for example around definitions, Council Tax for second and empty homes, and non-domestic rates thresholds for short-term lets. These included respondents restating their opposition to proposals, highlighting concerns that second home owners will be penalised unfairly, or suggesting that there is a lack of evidence that proposals will deliver the intended policy objectives. However, respondents also saw potential for the proposals to have a positive impact, most notably in terms of tackling inequality in access to housing and supporting sustainability of local communities. Examples were cited of specific case studies illustrating the potential impact of proposals.

Importance of implementation

Respondents highlighted the importance of the approach to implementation in terms of realising positive impacts. This included reference to the time required to plan for implementation, and the potential need for increased council resources to support implementation (including any enforcement activities). There were also calls for effective data sharing across councils and partners to support implementation and enforcement, for example to ensure effective identification of second homes and prevent avoidance of higher premiums.

Concern around avoidance and ‘loopholes’ was also linked to calls for change to ensure that self-catering accommodation is not eligible for non-domestic rates reliefs, and reassessment of rateable values. Ensuring that short-term let properties cannot avoid local taxes was seen as crucial in terms of the objective of all owners making a fair contribution.

There was also thought to be a need for the implementation of the proposals to incorporate careful assessment of local circumstances, and for councils to use their discretion to better support policy objectives and to avoid unintended consequences. This was identified as especially important in ensuring councils can take account of varying needs and circumstances across rural and urban areas, and in balancing the needs of residents and communities with support for sustainable local economies. Tailoring of non-domestic rates thresholds to local circumstances was suggested. The wide range of motivations for people to own second homes, empty homes, or self-catering accommodation, and the various factors that can limit an owner’s ability to dispose of their property were also referenced.

Reflecting these concerns, there were calls for specific exemptions to ensure a fair approach or to avoid penalising owners unfairly. This included reference to exemption for specific locations or types of owner and varying exemption periods for higher Council Tax premiums. The importance of effective local engagement was also highlighted in relation to enabling a localised approach, for example to identify key groups where exemptions may be appropriate to avoid punitive impacts.

Also in relation to implementation of proposals, respondents commented on how any additional funds raised will be used, including that this should be determined by local authorities, with references to supporting fiscal empowerment and local democracy. There were also specific calls for funds to be retained to benefit local communities and support local services. There were suggestions with respect to updating current ring-fencing rules and to allowing flexibility in use of funds to enable councils to take advantage of local opportunities in support of policy objectives.

Wider policy context

Respondents also commented on the current consultation, and how the results will be used. In particular it was argued that findings must be considered in the context of other forthcoming and proposed policy changes, with specific reference to reform of Council Tax, short-term lets regulations, and visitor levies. There were also calls for Scottish Government to recognise that proposed changes come at a time when owners (especially of self-catering accommodation) are adjusting to a range of regulatory changes, and associated cost increases. It was noted that many are still recovering from the impact of COVID-19 and struggling with rising interest rates and price inflation.

Alternative approaches to housing supply

Finally, there were calls for the Scottish Government to consider alternative approaches to delivering policy objectives around housing supply and use of empty homes. This included a view that these objectives reflect a fundamental need for new affordable housing supply and will not be met without a significant increase in development activity.

A range of specific suggestions were also provided, including respondents setting out detailed proposals. These included:

• a new planning use class for second homes
• introduction of a grant scheme to bring empty homes back into use
• a housing licensing model splitting properties into ‘local market’ and ‘open market’
• abolishing SBBS rates relief and relief from LBTT for sale of second homes

There were also calls for dedicated advice and support services to help owners in identifying the most appropriate future use of their properties.