COUNCIL tax charges are “unfair” to private landlords, a commission was told yesterday. The Commission on Local Tax Reform was set up by the Scottish Government and the Convention of Scottish Local Authorities (Cosla) to gather evidence on “fairer ways of funding local government”.
Co-chaired by local government minister Marco Biagi MSP and Cosla president Councillor David O’Neill, it is examining issues of wealth, inequality and local democracy, as well as potential timetables for a transition to any new system.
In its final oral evidence session in Edinburgh yesterday, the commission heard claims from the Scottish Association of Landlords (SAL) that having to pay the rates was holding back investment in the private rental sector.
John Blackwood, chief executive of the SAL, said charges levied on unoccupied properties are a disincentive to upgrade and maintain properties for residential let.
He claims this is reducing value for money for tenants and is calling for a law change to allow landlords to take advantage of exemptions available to homeowners.
Landlords are charged up to 90 per cent of the full council tax rate on unfurnished, unoccupied homes and the SAL wants its members to be made eligible for the six-month “free” period to enable their stock to be repaired, upgraded or marketed to new tenants.
Blackwood said: “We just want a fairer system, a system that is fair to tenants and landlords, too.
“Landlords provide accommodation often to people who desperately need it.
“They want to minimise void periods — when one tenant leaves, they want to get another one in.
“When work needs to be done it’s often scheduled for when a tenant leaves, but the landlord has to pay 90 per cent of the council tax. That may mean that when work needs to be done, they may replace a boiler but decide not to redecorate in order to get another week’s rent.”
According to the Scottish Government, there were around 267,000 households in the private rented sector in 2011, amounting to 11 per cent of all households.
However, the proportion is higher in areas like Glasgow, where a 2012 council estimate put private rented housing at 19 per cent of all dwellings.
Blackwood said: “We have no fixed view concerning what form of local tax should replace the council tax but we do believe this is an opportunity to fix flaws in the current system.
“There are disincentives which mean landlords might be dissuaded from investing in upgrades or non-emergency repairs because of the lack of council tax discounts available to other groups.
“By ending these practices, landlords would be able to invest more easily in their properties and provide a better service for tenants.”
However, Graeme Brown, director of housing charity Shelter Scotland, says private landlords are not in need of further benefits.
He said: “Landlords already receive significant payments from the taxpayer in the form of housing benefit subsidies and profit from market rents that are some of the highest in Europe.
“Therefore it is quite right that they should pay their fair share of council tax. Any replacement to the current council tax should be progressive, modern and well-designed.
“A local property tax based on property value could play an important role in helping to stabilise property markets in Scotland.”
A spokesperson for the commission said: “The commission has so far heard from a range of individuals and organisations keen to make their views known on the future of local taxation in Scotland.
“We are putting the evidence at the heart of our work.
“By listening to communities across Scotland, this independent and cross-government commission is working to examine the alternatives, and pave the way for a system of local taxation that is fair and fit for purpose in the 21st century.”
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