All short-term lets to be licensed by local councils in Scotland

All Scottish councils will have to establish a local licensing scheme for short-term lets by October next year under legislation laid before the Scottish Parliament.

Under the legislation, all local authorities will be required to establish a short-term lets (STLs) licensing scheme by October 2022.

Existing hosts and operators will have until April 1, 2023 to apply for a licence for each property they operate as a short-term let. All short-term lets in Scotland will have to be licensed by July 1, 2024.

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The plans were met with a mixed reaction from the hospitality industry, with some calling for the initiative to be replaced by a mandatory registration scheme.

Residents in some areas have raised issues of noise and disturbance from short term lets.

The legislation was developed after residents across Scotland, especially in areas such as central Edinburgh and popular rural areas such as Skye, raised significant concerns about the impact of short-term lets on their communities, including noise, antisocial behaviour and the impact on the supply on housing in some areas.

The Scottish Government, which put the issue out to consultation, said it aimed to ensure the needs and concerns of communities are balanced with wider economic and tourism interests.

In February, the Scottish Parliament passed legislation designed to make it easier for local authorities to manage the STL market. This allowed councils to establish STL control zones, which would require any property operating as a STL for more than 28 days a year to get planning consent.

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‘Pragmatic and significant’ changes to licensing scheme for short term lets

Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers (ASSC), said: “We are very disappointed that the Scottish Government are pressing ahead with these onerous and ill-considered regulations, which will damage Scotland’s vital tourism sector at a time when we should be supporting small businesses to recover from Covid-19.

“The ASSC have always strived to ensure a balanced and proportionate approach and get a regulatory framework in place that works for all. Our proposals for a mandatory registration scheme with health and safety provisions not only have the support of business and tourism stakeholders, but have cross-party political support, with the exclusion of the Scottish Greens.”

However, UKHospitality Scotland executive director Leon Thompson welcomed the proposals.

He said: “UKHospitality Scotland has been consistent in supporting the Scottish Government’s efforts to ensure that short-term lets are subject to the same type of regulations as other accommodation providers.

"It is good to see that the licensing order for short-term lets has now been laid at Parliament. Its introduction will help ensure the safety of guests and neighbours and can enhance Scotland’s reputation as a leading visitor destination.

“Many hospitality businesses continue to report challenges in finding accommodation for workers, particularly in rural areas. It may be that licencing the short-term lets market can help to rebalance short and long-term rentals in our fragile communities.”

Mr Thompson said he welcomed plans to review the tax treatment of short-term lets.

“Creating a level playing field on tax has also been an important part of our conversation with the Scottish Government,” he said.

"At a time when hospitality businesses continue to face into an extreme financial headwind, it is helpful that the Scottish Government has also pledged to review the tax treatment of short-term lets to ensure all of these businesses make an appropriate tax contribution.”

Edinburgh City Council welcomed the plans, which will see all Scottish councils told to establish a local licensing scheme for short-term lets by October next year, saying the holiday lets industry “hollows out” communities in the capital.

Currently short-term lets in Edinburgh can be required to apply for planning permission, but only on a case-by-case basis, which in practice only takes place if a local community raises complaints about noise and anti social behaviour.

Under the new rules, all short term lets – whether existing or in the future – will have to be licensed, under a separate system.

Councillor Catherine Fullerton, regulatory convener for Edinburgh City Council, said: “Short-term lets continue to hollow out communities in Edinburgh, reducing housing supply, increasing housing costs and causing anti-social behaviour.

"We’ve been working with the Scottish Government to help develop much needed regulatory powers for these types of properties and we look forward to continuing that co-operation, along with other stakeholders, to deliver an effective and robust licensing scheme as soon as possible.”

Housing secretary Shona Robison said: “We have already introduced legislation allowing councils to establish short-term let control areas and manage numbers of short-term lets. This is the next significant step to delivering a licensing scheme that will ensure short-term lets are safe and the people providing them are suitable.

"We want short-term lets to continue making a positive impact on Scotland’s tourism industry and local economies while meeting the needs of local communities.

“Short-term lets can offer people a flexible travel option. However, we know that in certain areas, particularly tourist hotspots, high numbers of lets can cause problems for neighbours and make it harder for people to find homes to live in.

"The licensing scheme and control area legislation give councils the powers to take action where they need to."

She added: “We appreciate the input from tourism bodies, local government, community organisations and others in reaching this point, and look forward to delivering a short-term lets licensing scheme that works for Scotland.”

The new legislation is subject to approval by MSPs. Legislation allowing councils to establish short-term let control areas and manage numbers of short-term lets came into force in April 2021.

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