A CALL has been made for the Scottish Government to “step up” its action on the rural housing crisis following news that second home owners in Wales may see their council tax rocket.
The Welsh government announced last week that second homes could pay four times their current level of council tax from next year – an increase of 300% on the current second home premium. The move is an attempt to address the problem of locals being priced out of housing markets.
Rules on the ability to dodge council tax and apply instead for business rates are also to be tightened so that only properties available for let for at least 252 days and actually let for 182 days will qualify for the lower rate.
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Now campaigners in Scotland are calling for the Scottish Government to follow suit, as well as bring in other measures to address the chronic shortage of affordable housing in places like Skye, Harris and Arran.
Màrtainn Mac a’ Bhàillidh, of Gaelic campaign group Misneachd, said the current rules around business rates for second homes in Scotland were “a joke”.
At the moment, second homes can be registered as a business – as long as the house is available for rent for 140 days a year and rented out for at least 70 – to be eligible for support packages and rates relief without having to pay any council tax for services.
Introducing rules similar to those proposed in Wales and an increase in council tax for second homes would help – but would only work as part of a toolkit urgently needed to address the problem which has become even more acute since the pandemic struck, according to Bhàillidh.
“It’s really bad at the moment and certain islands like Skye and Harris are worse than others,” he said. “Properties are flying off the market – people are paying cash and buying houses unseen without even having visited the island. Wages in the Highland and Islands are lower on average than in cities so the locals have no way to compete with cash buyers.
"There are so many aspects to this and the Government needs to step up. Properties are few and far between and rents are extortionate, meaning that even professional people like teachers, doctors and nurses who want to work here cannot find anywhere to live.”
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Misneachd has put forward a number of ways to address the problem.
“We are in favour of a land value tax, particularly for big estates that take up quite a lot of the Highlands and who are as much responsible for this in terms of unavailability of land as individuals who own a holiday home,” said Bhàillidh. “And at the end of the day house prices need addressed. There has to be a limit on who can buy them. In Jersey you have to be a resident to buy a property, have a family connection or offered a job in a qualifying sector and there are similar schemes in the Lake District so there are definitely lots of things the Scottish Government could be doing.”
While building more homes is part of the mix, he said they would just be snapped up unless there was a limit on who could buy them.
Musician, crofter and An Lòchran board member Pàdruig Morrison, from Uist, said he was also in favour of the new Welsh policy being introduced in Scotland.
“Current Scottish Government policies don’t challenge second homes enough and just as has been recognised by the Welsh government, second homes are massively affecting rural areas, especially in the Highlands and Islands,” he said. “Young people from here are scarcely able to get a house or croft in areas they grew up in. We need to keep the young people here, we need to keep the culture alive and, most importantly, we need a community here all year round, not just for a couple of weeks a year.”
Sheena Borthwick-Toomey of Arran Development Trust said the Welsh plan was a good one. “Arran has approximately 23% second homes – second only to St Ives in Cornwall – and this can be much higher in certain villages, which are known as ‘dark villages’ as there are not enough people living there on a permanent basis,” she said. “It impacts local schools, services and quality of life.”
She added that any revenue raised through Welsh style methods should come back into building affordable homes in the respective community impacted.
“When new homes are built in the area, 25% of ‘build cost’ should go into affordable housing and any new general needs homes should be constructed with a Rural Housing Burden attached to the title deeds where second homes are above 30% of the total housing stock in the village/town area,” she said. “The Rural Housing Burden would ensure the new home is protected in perpetuity as a principle residence and can never be used as a holiday or second home.”
She added that income tax on long-term rental income could also be reduced to 5% as it is in Germany.
Green MSP Ariane Burgess said the party would be watching what was happening in Wales “with interest”.
“The increasing number of second homes is a driving force of the housing crisis we are seeing, particularly in rural communities,” she said. “Far too many people are struggling to find a home and are being priced out of it.
“Housing is a fundamental human right; it is not a luxury. With Greens in government we are building warmer and better homes, and delivering a fairer deal for Scotland’s renters, including rent controls. We cannot leave something as fundamental as people’s homes to market forces.”
A Scottish Government spokesperson said: “We are aware of the benefits second homes bring to those who own them and the tourism businesses they support. However, in some communities, these kinds of ownership patterns impact on the availability of homes to meet local needs and on community sustainability.
“We have already taken action by changing council tax legislation to enable councils to either grant a discount or remove the discount in all or part of their council area for second homes. In addition, the Additional Dwelling Supplement, charged as part of the Land and Buildings Transactions Tax, also makes it more expensive to buy additional properties in Scotland.
“We have committed in housing to 2040 to give all local authorities powers to manage the numbers of second homes where they see this as a problem in their area. We will be engaging with stakeholders on how best to support and empower local authorities to allow them to manage issues relating to second home ownership in their area.”
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