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HIGHLAND COUNCIL RESPONSE TO
SCOTTISH EXECUTIVE DECISION ON COUNCIL TAX ON SECOND HOMES

The Highland Council has welcomed to the Scottish Executive’s announcement made today by Minister for Finance and Public Services Andy Kerr, that local authorities will be given discretion to reduce the current 50 per cent discount on council tax on second homes and long-term empty properties.

The Council has been at the forefront of the campaign to persuade the Executive to remove the discount on second and holiday homes and also to allow local councils to retain the additional income gained for investing back into important local services.

Second and holiday homes account for over 6% of the housing stock in Highland, but in some areas it is as high as 30% or higher such as in the Ardnmurchan peninsula where they can account for 90% of the housing stock in smaller townships.

At present, across The Highland Council area there are 6,888 properties that are registered as “no-one’s sole or main residence” that receive 50% discount on Council Tax although not all of these are second homes and long term empty properties, where it is hoped to reduce the current 50% discount. These 6,888 properties comprise 10% of the Scottish total of 66,500.

If full Council Tax was to be paid on all such Highland properties, it is estimated that the Council could stand to gain up to £3m, however, this figure will be less given the mandatory 10% discount imposed by the Executive and the number of exemptions listed under the new scheme.  A more accurate picture of how much the Council is likely to gain will depend upon the detailed rules that are still to be specified by the Executive.

The Highland Council has argued consistently for 100% Council Tax charges on all second or holiday homes and that there should no exceptions to the reduction or removal of discounts. This position is held in order to avoid a complicated administrative scheme, and to make the system clear to members of the public.

Convenor of The Highland Council, Councillor Alison Magee said: “We are glad that finally the Scottish Executive has agreed that the principle of charging for second or holiday homes is right and equitable.

“We also welcome the announcement that any resultant additional income generated will be retained and used locally to provide affordable housing which is greatly needed in the Highlands.

“Unfortunately, without clear indication from the Executive exactly how the new scheme will operate: in particular, what might happen to other funding streams such as the grant currently given from the Executive to local authorities; and the number of properties that will qualify as exempt; it is impossible for the Council to quantify the financial benefits with any degree of accuracy.  We would ask the Minister to clarify the position as a matter of urgency.”