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Owning a north-east holiday home could become even pricier

By David Porter

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All along the north-east and Moray coastline, homes which were purchased in the picturesque coastal villages which are rented out as holiday accommodation could be set to hit their owners with higher costs.

With new licensing laws for short term rentals already having hit the sector, new draft legislation aims to prioritise homes for living in with a new Council Tax premium on second homes.

Draft regulations allowing local authorities to charge up to double the full rate of Council Tax on second homes have been laid before the Scottish Parliament this week.

Holiday home owners in locations such as Crovie could see costs rise markedly.
Holiday home owners in locations such as Crovie could see costs rise markedly.

If approved, local authorities would be able to apply the Council Tax premium on homes that are not used as a main residence.

This change, a Programme for Government commitment, attracted majority support in a joint consultation with the Convention of Scottish Local Authorities (COSLA).

It will bring second homes into line with long-term empty homes from April 1, 2024.

In the 2024-25 financial year, it will be based on rates from 2023-24.

Public Finance Minister Tom Arthur said: “We want everyone in Scotland to have a home that meets their needs.

"We know second homes can sometimes benefit local communities, but they can also restrict the availability of housing and increase costs for people who want to rent or buy.

“Subject to approval by Parliament, this legislation aims to prioritise housing for living in by allowing local authorities to charge a Council Tax premium on second homes.

"Backed by a majority of respondents to our joint consultation with COSLA, it will enable councils to seek a fair contribution towards local services from second-home owners.”

COSLA Resources Spokesperson Councillor Katie Hagmann said: “Subject to Parliamentary approval, COSLA very much welcomes the ability for councils to take the decision to increase the premium on second homes in their areas. Allowing the politicians who are closest to their communities to take decisions about what best suits local needs and circumstances is well aligned to the Verity House Agreement.”

The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 -

A second home is classed as any home that is not used as someone’s primary residence but that is occupied for at least 25 days in a year.

Latest figures show that as at the end of September 2022 there were 24,287 second homes in Scotland.

Second homes are currently subject to a default 50 per cent discount on Council Tax.

However, local authorities can vary Council Tax charges and the majority already charge second home-owners the full rate of Council Tax, the maximum currently allowed.

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