Call to raise council tax on holiday homes

Published on Thursday 7 May 2009 20:35

LOCAL authorities should be allowed to charge higher council tax rates on second homes and holiday houses, a committee of MSPs said yesterday.

Members of Holyrood's rural affairs and environment committee have been looking at rural housing.

Their report, published yesterday, highlighted that "much of rural Scotland faces a serious affordable housing problem".

Among their recommendations, the committee called on the Scottish Government to extend local authorities powers to vary council tax rates for second homes or holiday homes, to allow them to charge increased rate for these properties in areas where there is a serious housing shortage.

Since 2004 authorities have been allowed to discount the council tax rate on second homes by between 10 per cent and 50 per cent, rather than simply having a flat rate discount of 50 per cent.

That power was given on the condition that the cash raised from reducing the discount would be used to fund affordable housing in their area.

Most rural councils already apply a reduced discount, using the money to support affordable housing.

But last year Highland Council chiefs said councils should have the option of taxing second homes and holiday homes at up to 200 per cent of the council tax rate, arguing this could more than double the income from second homes and could fund more affordable housing.

Committee convener Maureen Watt said it was clear that "more needs to be done to give local authorities more powers to deal with pressures caused by a lack of rural housing in specific areas". She argued: "This includes the possibility of allowing them to increase council tax charges on second homes."

In the report the committee made it clear that "many more houses need to be built in rural Scotland, in small towns and villages and in the countryside".

But they complained there was an "over-cautious planning culture in much of rural Scotland" which meant there was a presumption against developments, including housing developments, in many areas.

The committee also urged councils to provide some more land for housing.