Holiday Lettings news - Second home owners in Scotland could face increase in council tax

Second home owners in Scotland could face increase in council tax

Second home owners in Scotland could be charged more council tax. The Scottish government is considering charging holiday home owners up to twice the normal rate of council tax.

Local authorities may be allowed to charge owners of holiday homes in Scotland twice as much council tax, reports The Herald. The suggestion has been put forward by Dr Michael Foxley, the Liberal Democrat leader of the Highland Council.

Foxley's proposal comes as the Scottish government considers the option of giving individual councils significant powers to vary tax rates on second homes, which has been outlined in a consultation document. At present, owners of holiday homes in Scotland pay 90 per cent of the normal council tax rate.

"At the moment, council tax on second homes brings in about £2.5m here, at 90 per cent of the normal rate. But if we could go up to 200 per cent, we'd have about £5.5m. That would be directed at funding affordable houses in holiday areas," Dr Foxley said.

"There is a range of options to base a second homes tax on, but because second homes affect various areas differently, a one-size-fits-all approach across the whole of Scotland may not be appropriate," claim the authors of the document.

"We are interested in creating a tax that would allow local authorities to play a role in determining how much tax owners of these properties in their areas pay...Local authorities for whom such properties have reduced the supply of affordable housing may wish to set a higher level of tax, which could be used to invest in local housing."

Council leaders have welcomed the suggestion as they feel the extra demand second homes create in the housing market pushes prices up, reducing the supply of affordable housing. However, the Scottish Labour Party has said that increasing council tax for second home owners could end up penalising rural Scotland.

"This massive tax hike will stop people spending money and their leisure time in rural communities. Alex Salmond [leader of the Scottish National Party] should stop and think again before he does real damage to Scotland's rural economy," a spokesman for the party said.

This story was brought to you by holidaylettings.co.uk, the UK's No.1 holiday home website.

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