- As is well known, Council Tax is a tax on domestic property collected by local councils and the money is used to pay for local services like rubbish collection, roads and street lighting.
- Some people can get a discount on their Council Tax bill, and some don’t have to pay any Council Tax. As the Citizens Advice Scotland website says, the rules about who has to pay are quite complicated but Citizens Advice Scotland give a useful and fairly detailed overview which can be found here: Council Tax – Citizens Advice Scotland
- They also provide an online “tool” which asks a set of questions to help you find out if you are exempt from having to pay council tax or if you are eligible for a discount or reduction in your bill: Council Tax Reduction Tool – Citizens Advice Scotland (checkmycounciltax.scot).
Second homes – the current rules in outline
- The purpose of this note is not to give an outline of the general rules about Council Tax. But something is said here about Council Tax discounts for second homes because new Regulations – laid before the Scottish Parliament this month – are poised to change things.
- More is said about those changes below but, in broad terms, the existing rules about discounts for second homes are that Councils may either charge the full Council Tax or may grant a discount of between 10% and 50%.
- As to what counts as a “second home” this is defined as follows:
“a dwelling which is no one’s sole or main residence, but which is furnished and in respect of which, during any period of 12 months, the person who is liable to pay the council tax that is chargeable can produce evidence to establish that it is lived in other than as a sole or main residence for at least 25 days during that period.”
- That definition is linked to the definition of “unoccupied dwelling” which is “a dwelling which is no one’s sole or main residence, but which is not a second home.”
- Those definitions are not set to change.
The effect of the proposed amendments (if approved)
- If approved, the new Regulations will amend the existing rules (contained in the Council Tax (Variation of Unoccupied Dwellings)(Scotland) Regulations 2013) with effect from 1 April 2024.
- Under these new rules local authorities would be able to charge up to double the full rate of Council Tax on homes that are second homes.
- This would bring second homes into line with long-term unoccupied dwellings i.e. dwellings which have been unoccupied for a continuous period exceeding 12 months (subject to certain limited exceptions).
- A “second home” is classed as any home that is not used as someone’s main residence but that is lived in for at least 25 days in a year. In other words, the definition quoted above is not set to change.
- And, as mentioned above, second homes are currently subject to a default 50% discount on Council Tax but local authorities can vary such Council Tax charges and the majority already charge second home-owners the full rate of Council Tax i.e. the maximum allowed under the current rules.
- The key effect of the proposed rule changes would be to remove the restrictions on local authorities charging more than the full rate of council for second homes. Instead, they would give local authorities the power to double the council tax payable on second homes.
- The scope to impose an increase of up to 100% is however restricted for any property which is a second home and:
- has been purchased by a new owner within the past six months (or such longer period as may be agreed by the oval authority); and
- which a local authority is satisfied is the subject of repairs or renovations with a view to improving the property.
- Local authorities will also have discretion to extend the period for which the exclusion applies, where they consider that it is appropriate to do so, for example in order to enable works to be completed.
Comment on these proposed amendments by the Public Finance Minister
- Of these proposals the Public Finance Minister Tom Arthur said:
“We want everyone in Scotland to have a home that meets their needs. We know second homes can sometimes benefit local communities, but they can also restrict the availability of housing and increase costs for people who want to rent or buy.
Subject to approval by Parliament, this legislation aims to prioritise housing for living in by allowing local authorities to charge a Council Tax premium on second homes. Backed by a majority of respondents to our joint consultation with COSLA, it will enable councils to seek a fair contribution towards local services from second-home owners.”
Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Andrew Lindsay: email Andrew@mitchells-roberton.co.uk