Council Tax on Second Homes and Long Term Empty Dwellings
Local authorities have discretion to reduce or retain the council tax discount on second homes and long-term empty properties to between 10% and 50%. Local authorities are able to reduce or retain the discount within their entire area, or only those areas where second homes are a particular problem. The 10% level has been retained to allow the additional income generated from reducing the discount to be identified.
The additional income is retained locally and routed through Registered Social Landlords (RSLs) for the provision of new-build affordable social housing to meet locally determined priorities.
There is a mandatory 50% discount for certain categories of second homes and long-term empty properties. These categories are:
- Purpose built holiday homes: For these types of properties, second home owners are not competing in the same market as local house buyers.
- Second properties owned or rented by those living in tied accommodation: This would include members of the clergy, farm-workers and publicans who are required to live in the licensed premises where they are tenants. The previous administration did not want higher council tax bills to discourage those living in tied accommodation from owning or renting second homes for their future security.
- Vacant dwellings which subsequently undergo extensive repair after sale: Currently, vacant dwellings which are undergoing major repair works are exempt for up to 12 months from the last occupation day. After that, they pay 50% council tax. This means that if somebody buys a property that has been vacant for over a year and undertakes major repair works that prevent it from being occupied, they will be faced immediately with a full council tax (and water and sewerage) bill. Previous Ministers felt it reasonable to grant a new owner of such a property a 50% discount for a further 6 period of 6 months, before opening it out to local authority discretion.
- Dwellings vacant for less than 12 months: Currently, vacant properties are exempt from council tax for the first 6 months and then pay 50% after that. Increasing this after 6 months may place undue financial pressure on some owners, particularly those who are genuinely trying to deal with a vacant property. There are many reasons why a property might be vacant (and unfurnished). Some may be local authority properties, some may be those which are proving difficult to sell. Former Ministers therefore decided that it was reasonable to maintain the 50% discount for the second 6 months and allow the local authority discretion to start after 12 months.
The enabling legislation (The Council Tax (Discount for Unnocupied Dwellings) (Scotland) Regulations 2005 SSI No. 2005/51) was passed by the Scottish Parliament on 26 January 2005, the new policy will take effect from 1 April 2005.
Please click on the links below for more information
Consultation
Consultation Analysis
Press Release
Guidance