Short-term lets - licensing scheme and planning control area legislation: draft business and regulatory impact assessment (BRIA)

H: Scottish Firms Impact Test

126. The firms most affected by this legislation are hosts and operators providing accommodation, where they are set up as businesses. These are most likely to be set up as businesses where they are self-caterers letting out a number of properties. In June 2021, there were around 17,850 premises registered on the Non-Domestic Rates roll as self-catering properties. However, there are also a number of premises operating as commercial accommodation providers that are registered for council tax, rather than Non-Domestic Rates. At present, there is limited data on the scale of this section of the accommodation sector: over 1,400 small accommodation providers on the council tax roll received grant support through the Small Accommodation Providers Paying Council Tax Fund late-April 2021; this included bed and breakfasts, guest houses, and self-catering premises^[29].

127. It is challenging to gauge the full size of the short-term lets market, as providers are able to offer accommodation ranging from single rooms, whole homes and other unconventional accommodation; these include domestic and commercial properties. We have therefore assumed that there are 32,000 short-term lets in Scotland based on research in 2019 which also showed that around 70% of these are for secondary letting; of these, some of these will part of businesses and some will not. The majority of the properties used for secondary letting will belong to hosts with more than one property. It is hard to be definitive about the number of businesses affected because of a lack of robust data about the sector (which the licensing scheme will resolve) and because the classification of a property as non-domestic does not necessarily mean it is part of a business^[30].

128. However, there is a whole ecosystem around the provision of short-term let accommodation ranging from platforms such as Airbnb, booking.com and Expedia through to hosting intermediaries and holiday letting agencies. In section C3 above, and in the 2020 consultation report, we have set out how we have engaged with all the different types of actor in the system.

129. The STAA, Airbnb and ASSC have made strong representation on behalf of hosts. Airbnb has stated that they considered the proposed regulatory system to be complex, costly and unfair for hosts^[31]. During the 2020 consultation, Airbnb published a table setting out the steps that hosts would need to take to comply^[32]. They said:

The Scottish Government is consulting on a new licensing and planning framework for short-term lets, coming into force in April 2021. We think it’s complex, costly and unfair for hosts. Find out more about what the Scottish Government has set out below, and speak to your local politician with your thoughts on how this will affect you.

130. These steps are set out at Annex D, together with the Scottish Government’s comments.

131. The ASSC has also engaged its membership and with the Scottish Government and the principal points made of relevance to this BRIA at events and follow-up questions are set out at Annex E.