Short-term lets: consultation

1. Executive Summary

1.1. Short-term lets have become the subject of much controversy in some parts of Scotland and evoke strong opinions. Our 2018-19 Programme for Government made a commitment to ensure that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests. This consultation asks for your views on what those powers should be.

1.2. A Short-Term Lets Delivery Group was established in 2018 to assess the evidence base and the impact, positive and negative, of short-term lets, identify the existing powers councils have and explore whether further measures are required. The Group comprises officials from across relevant areas of government including: better regulation, community empowerment, economy, housing, licensing, planning, tax and tourism. This consultation paper draws together this wide range of policy interests in short-term lets.

1.3. The introduction to the consultation paper provides a summary of the available evidence, with much fuller details about the current position in Scotland and elsewhere in the world set out in a separate supporting document. There has clearly been a significant growth in short-term lets in a small timescale, and while there are significant amounts of data available about the position in Edinburgh, there is much more limited information on the position elsewhere in Scotland.

1.4. The Scottish Government welcomes the economic benefits which the development of new models of short-term letting brings to Scotland. However, we also recognise the problems caused by short-term lets which are summarised in this paper. Your views are invited on how they might be addressed.

1.5. This consultation paper outlines a regulatory approach which might involve registration and/or licensing of short-term lets, with the possible addition of a market-based mechanism to control numbers. A range of approaches have been adopted in cities and countries around the world but we need to find the right approach for Scotland and enable different areas to tailor the approach to their local needs and priorities. The consultation asks for your opinions on that as well as on the types of short-term lets which should be regulated and the controls which should be applied.

1.6. The paper also signposts other action being taken by the Scottish Government which may impact on short-term lets, including the developments in the Planning Bill which is currently before Parliament. The fiscal levers available to the Scottish Government also potentially have a key role to play in delivering an optimal solution. The paper therefore highlights that the Scottish Government has committed to an independent evaluation of the Small Business Bonus Scheme for non-domestic rates and will consult this year on the principles of a locally determined tourist tax, including its application to short-term lets prior to introducing legislation to permit local authorities to introduce such a tax, if they consider it appropriate for local circumstances. The Small Business Bonus Scheme evaluation, planned to commence in June 2019, will explicitly explore the impact of the Small Business Bonus Scheme on the short-term letting market and the Scottish Government are committed to the findings being addressed in time for the 2022 non-domestic rates revaluation.

1.7. Your views will help the Scottish Government shape the regulatory approach to short-term lets. Questions are asked at relevant points in chapters 3 and 4 and restated in the response form in chapter 5, which is also available online at https://consult.gov.scot/housing-services-policy-unit/short-term-lets