Edinburgh father calls for tax system to be overhauled to free up more housing

Sam McCahon wants to change how council tax works, after finding it very difficult to find somewhere to live in the capital

An Edinburgh father says council tax discounts on second homes should be scrapped, after he and his family were left homeless when his rented property was turned into a holiday let.

Sam McCahon, who is a postgraduate law student at Edinburgh University, also wants to see landlords rather than tenants pay council tax.

Mr McCahon’s rent lease agreement expired in June 2021 and his landlord decided to take the property off the rental market and use it as a holiday let instead.

Edinburgh father Sam McCahon says he struggled to find somewhere to live because so many properties are now holiday lets.

Mr McCahon ended up homeless and living in guest houses with his wife and five-year-old son for three and a half months. Now he says the council tax system needs to be changed to encourage more people to use their second homes and empty properties for long-term rent.

‘People don’t appreciate the homelessness this creates’

Mr McCahon, who is originally from the United States, said: “When I spoke to estate agents they said one of the problems is the festival – a lot of people take their apartments off the market and go for holiday rentals instead.

“When our lease ended the owner wanted to do that because there is a lot more money in that.

Father Sam McCahon wants to see the council tax system overhauled in a bid to free up more housing.

“We ended up wandering from place to place in Livingston and Falkirk and I would have to get on a bus to bring my son to his school.

“My son asked my wife, ‘how come all my friends get to have a house but we have to keep moving every day?’

“Most people don’t appreciate the homelessness this creates.”

He believes changing council tax discounts on second homes and empty homes would encourage more to be put on the rental market.

Currently second homes are given a default 50 per cent council tax discount, although councils have the power to alter this and can even offer no discount at all.

And he wants landlords instead of their tenants to be liable for paying council tax.

Mr McCahon added: “This policy actually rewards you if you have an investment property because you can get a discount on council tax.

“This is a legacy that goes all the way back to the landed gentry to push the costs onto tenants.

“It is an antiquated system.”

He said it is down to the government to create policies that encourage more houses to be made available for families.

Mr McCahon has now submitted a petition to the Scottish Parliament, calling on the government to remove council tax discounts on second homes.

The government is looking at proposals to give councils the power to charge up to 100 per cent council tax on second homes, or more than 100 per cent on empty homes.

‘We should all pay business rates’

Mr McCahon is not the only one calling on the government to change how it taxes second homes.

One holiday rental owner in the Highlands has suggested business rates relief should not be applied to those running short-term lets.

If a holiday let is available for 140 days a year and is let for more than 70 days, the owner pays business rates rather than council tax.

However if they do not meet this 70-day threshold, they pay council tax instead.

Alan McLeod, who has a holiday rental near Cape Wrath in Caithness, says this should be changed so everyone with a holiday let has to pay business rates.

He said: “The Scottish Government has introduced an arbitrary level of occupancy.

“If a property is not achieving at least 70 days of rent, the government has decided to treat that property no longer as a business, but as a residential home.

“My position is very clear, we should all pay business rates.”

He worries setting this baseline means operators are incentivised to take in as many bookings as they possibly can on sites such as AirBnB, which drives down quality and is a “race to the bottom”.

Mr MrLeod added: “If rates relief is taken away, everyone will need to improve the quality of their property because if they provide a poor service, it will be the market who dictates who survives and who falls.”

Mr McLeod has also submitted a petition to the Scottish Parliament to get the government to prevent holiday let owners from obtaining rates relief.

Government says it is committed to building more homes

The government said introducing measures to licence and regulate short-term lets will give councils the ability to create control areas to manage high concentrations of holiday lets in places like Edinburgh and the Highlands.

It has also committed to building 110,000 affordable homes by 2032, at least 70 per cent of which would be for social rent.

A spokesman for the Scottish Government added: “Scotland has led the UK in providing affordable housing, with over 118,000 homes delivered since 2007 and £3.5 billion of funding is being made available in this parliamentary term towards the delivery of affordable homes.

“Last month we published a consultation seeking views on increasing council tax charges on second homes and long-term empty properties, as a way of balancing local requirements for housing with those of tourism businesses and the local economy they support.

“We encourage people to contribute to this consultation which is open until 11 July.”

City of Edinburgh Council has been approached for comment.