Council tax on second and empty homes/ Non-domestic rates: consultation

Our Housing to 2040 Strategy commits us to provide councils with tools and powers to support local areas to make the best use of existing housing stock. This includes managing the number of long-term empty homes, short-term lets and second homes.

We ran a joint consultation with COSLA to seek views on how local taxation can help achieve this. The consultation proposal was whether to provide additional powers to councils allowing them discretion to:

• charge up to 100% premium (double the full rate) on council tax for second homes
• charge more than 100% premium on council tax for second homes and long-term empty homes

The aim being to encourage more residential accommodation to be used as homes for living in and for these to be occupied for more of the time. As local areas need to decide how to achieve the right balance in the use of housing to meet local needs and to support thriving communities, we also asked for views on whether the current non-domestic rates thresholds for self-catering accommodation should change, and/or if councils should have discretion to set them.

The consultation ran from 17 April to 11 July 2023. In total 981 responses were received, 73 from groups or organisations and 908 from individual members of the public.

On 24 October 2023 we published a consultation report compiled by Craigforth, an independent social research company, with an analysis of these responses.

This can be viewed on the Scottish Government website at Council tax for second and empty homes, and thresholds for non-domestic rates: consultation analysis - gov.scot (www.gov.scot)

Ministers, and the Joint Working Group established with COSLA and the Green Party to consider local taxation, considered the consultation responses.

On 5 September 2023, as part of the Scottish Government's Programme for Government, it was announced that legislation would be laid at Parliament to introduce new powers that would enable councils to choose to double the full rate of council tax on second homes. This was laid on 8 November 2023 and a majority of the Scottish Parliament approved it on 13 December 2023.

From 1 April 2024 councils can decide to double the full rate of council tax on second homes. The powers also enable councils to grant a six-month ‘grace period’ from the Empty Homes Council Tax premium where new owners are undertaking repairs and renovations, which is aimed at incentivising reoccupation and improvements.

Further information about the legislation is published alongside it in a Policy Note at The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 (legislation.gov.uk)

Ministers decided not to alter the thresholds for non-domestic rates for self-catering accommodation at this time, but this is being kept under review.

The remaining aspects of the consultation proposal are still under consideration by the Joint Working Group.