COUNCILS will monitor whether new tax changes for second homes will lead to the properties being turned into short-term lets instead, a minister has said.
The Scottish Government plans to give councils the power to double council tax rates on second homes from April 1 2024, in order to incentivise an increase in houses available as primary dwellings or long-term rentals.
The latest figures show there were 24,287 second homes in Scotland last September and it is thought the tax changes will raise around £35 million.
On Tuesday, Holyrood’s Local Government Committee heard from public finance minister Tom Arthur about the Government’s plans.
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Arthur stressed it would be up to local government on how to apply any tax increases.
He said: “Second homes in some areas may be making a positive contribution, equally in other areas it may be the view of local authorities that they’re causing pressures.
“A way of helping to address that, in tandem with other levers at the disposal of local authorities, would be to use these discretionary powers.”
MSP Willie Coffey said the committee has previously heard evidence that second homeowners may decide to change their properties into short-term lets, which could allow them to circumvent the new council tax and pay non-domestic rates instead.
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This could mean they are “not paying anything at all”, he said.
Arthur said it would be something “we continue to monitor and keep under review”.
He said it would be “a consideration for local authorities in terms of monitoring any behavioural response that takes place and in doing so reassessing whether any policy decision they take is having the desired effect”.
Cosla resources spokeswoman Katie Hagmann said the local government body “very much welcomes the ability for councils to take the decision to increase the premium on second homes in their areas”.
She added that “allowing the politicians who are closest to their communities to take decisions about what best suits local needs and circumstances” is in line with the principles set out in the Verity House Agreement – the deal said to mark a new relationship between town halls and the Scottish Government.
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