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Scottish Government Publish Council tax for second and empty homes, and thresholds for non-domestic rates: consultation analysis

The Scottish Government has published the analysis document for their recent consultation on council tax for second and empty homes, and thresholds for non-domestic rates.

While this is not the formal response of the Scottish Government, it summates the main arguments made by stakeholders during the consultation, and shows the level of support for the policy proposals.

The following summarised the thoughts regarding letting thresholds for non-domestic rates:

  • A small majority of respondents (53% of those who answered the question) supported a change in letting thresholds for self-catering accommodation to qualify for non-domestic rates.
  • Most of those calling for change wished to see an increase in existing thresholds, a view primarily linked to concerns that self-catering accommodation can exacerbate housing shortages and negatively impact local communities and economies.
  • Those who did not support a change in letting thresholds often saw current thresholds as reasonable, particularly in the context of additional regulatory requirements placed on accommodation owners in recent years (including a recent change to non-domestic rates thresholds). It was also argued that the existing threshold of 70 days actually let can be very difficult to achieve in parts of Scotland.
  • From the thresholds suggested in the consultation paper, those who supported higher thresholds were most likely to recommend thresholds of 180 days actually let and 250 days available for let. However, both in relation to days actually let and days available for let, many respondents suggested other thresholds that were higher than any of the options set out in the consultation paper. These were typically linked to a view that thresholds should be set to ensure that a greater proportion of self-catering properties pay Council Tax. However, it was also argued that more modest levels would be reasonable in view of a range of limiting factors, including Scotland’s relatively short tourist season.
  • A majority of respondents (57% of those who answered the question) thought that councils should have discretion to change the non-domestic rates ‘days actually let’ threshold for their local area. It was argued that councils require such discretion to address local housing issues and to respond to other local circumstances. An alternative perspective was that consistent, national standards provide certainty and that there should be a single, nationally set threshold.

Commenting on its publication, ASSC CEO Fiona Campbell, said:

“This cannot be another fait accompli and is yet another early test of the Scottish Government’s New Deal for Business, alongside short-term let licensing and the local visitor levy. Our sector not only needs to be listened to but actually heard so the burden to hard-pressed businesses is minimised. New Deal principles must be put into practice.

We need a holistic approach to regulation, not silo working, as the cumulative impact of a whole host of Scottish Government regulations could cripple small businesses operating in Scotland’s vital tourism industry. Changes to NDR thresholds would come at time when self-caterers have been hit by STL licensing and planning regulations, a lowered Small Business Bonus entitlement, not to mention the prospect of a visitor levy. That’s before we even consider the overall business environment with pandemic recovery and the cost-of-living crisis.

The ASSC eagerly awaits the formal response to the consultation from the Scottish Government and we will constructively engage with ministers and officials to try and secure the best outcome for our members.”

The consultation analysis document can be viewed here: Council tax for second and empty homes, and thresholds for non-domestic rates: consultation analysis – gov.scot (www.gov.scot)

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