Council tax on second homes should rise 'up to 400%' to help tackle Highland housing crisis

Council tax on second homes should rise up to 400 per cent and landowners must face tougher compulsory purchase powers under calls for radical measures to solve the Highland housing crisis.

Ailsa Raeburn, chair of Community Land Scotland, said radical changes were required to tackle the lack of permanent homes in the Highlands and Islands, meet the challenge of homelessness and grow the population.

Meanwhile, more houses were needed to retain the influx of workers due to arrive on large scale energy and industrial projects, such as the £350m Sumitomo subsea cable manufacturing plant at Port of Nigg on the Cromarty Firth.

She said: “We have businesses, local and global wanting to invest and grow in the Highlands and Islands. We have a beautiful place to live with a great quality of life. We have more and more of our own young people wanting to build their lives here. So what’s the problem? It’s housing.”

Ms Raeburn, who also sits on the board of Crown Estate Scotland and Highlands and Islands Enterprise, made a series of proposals on how to tackle the housing crisis in her recent Attwood Lecture at UHI Inverness.

READ MORE: Scotland’s largest landowner and the changing face of a Highland village

The impact of rising second home numbers on local communities, who are often priced out of an escalating market with numbers of permanent homes falling, could be tackled by council tax rises to both disincentivize ownership and raise money for affordable housing.

Ailsa Raeburn, chair of Community Land Scotland. | contributed

The Scottish Government has given discretionary powers to raise council tax on second properties by up to 200 %, with Western Isles Council among those now enforcing the higher level.

But Ms Raeburn said it should go higher.

She said: “Over a period of five to 10 years it could go to 300 or 400 % because we want to use tax as a way of driving change.

“It used to be the case that council tax on second homes was ringfenced and reinvested into affordable housing but that has recently changed and obviously our position would be that that should go back.

“Second home ownership is hugely impacting on the amount of housing that is available.

“We use taxation to change behaviours. You could try and encourage people to sell their second homes so they can be brought back into permanent use.”

Ms Raeburn added that thresholds to the Land and Buildings Transaction Tax should also change with higher rates applicable to house purchases for second homes.

To push development, the Scottish Government is currently reforming Compulsory Purchase Order legislation which is now deemed to be overly complex and outdated.

Ms Raeburn said the legislation needed to be modernised to force the compulsory purchase of land held by one or two owners to allow housing development to take place.

She said: “Quite often CPO legislation was brought in for big road or rail schemes and therefore it was specifically written to address those big infrastructure requirements.

“Actually what we need now is CPO to buy small sites on the edge of towns or villages.

“It is a completely different approach really. We need CPO schemes which are quicker and are easier.”

At present, the provision for CPOs were “so complex and onnerous” that most local authorities “won’t even try” to pursue them given the risk of legal challenge was so high.

Ms Raeburn said: “We need to bring these sites forward for development and we can’t let landowners hold us to ransom over it, which is effectively what is happening.

“A landowner will see that a local authority is interested in the land and assume they can keep pushing up the price and then schemes are not viable.

“Landowners are being unreasonable in their expectation of what the acquiring authority will pay.

“It is about introducing some more realism and changing the negotiating position so that schemes can go ahead and you don’t get landowners just sort of turning their face and saying ‘if you don’t pay me £50,00 I am not selling it or ‘I am going to take you to court”.

Ms Raeburn said Scotland’s concentrated pattern of landownership, where around 450 individuals own 50 per cent of the landmass, was “incredibly significant” in reducing land available for housing development.

She added: “If you had instead of 450 people owning 50 per cent you had 4,500 people owning 50 per cent, you would have a lot more people to go to. At the moment, there is no competition.”

In Applecross, the local estate owns 26,000 ha of land surrounding several local settlements with the community finding it “impossible” to secure any land for housing, she added.

Ms Raeburn said: “In the end the community managed to buy less than one acre of land at the road junction in the village from the NHS to develop for houses.

“This is the whole issue about monopoly ownership.

“If you have got a single landowner who owns all the land in a particular locality, they control everything so that is why CPOs are important.”

On Colonsay, the community took almost a decade to secure land from the island landowner.

She aded: “If a community needs a piece of land to develop housing or a local authority says we really need housing here or a housing association says we have money to build, they should have more power in this to say ‘we need 10 acres, let us talk about which 10 acres but the option of no 10 acres is no longer an option.”

“Some landowners will do it, sell at a good price, but they are few and far between.

“And particularly the new ones who are really just in it for natural captial speculation, they are not interested in having people here, they don’t live there and they absolutely don’t care if the school closes and whether or not people can’t get houses.

“That is why we have to change the balance and say ‘you own a really critical asset of Scotland ‘ and your land can deliver lots and lots of different things and one of these is delivering housing for local people - and you have got to come to the table and talk to us.”

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