The consultation document outlines the Scottish Executives
proposals for changes to the local authority tax base, in
particular proposals to reduce or remove council tax discounts
for second and long term empty homes.
The document outlines the current circumstances where these
discounts apply and notes that in Scotland there are over
60,000 properties which are currently in receipt of a second
home 50% council tax discount. The document notes that this
equates to around 3% of all properties in Scotland, a potential
contribution of £25 million per annum to Scottish local authority
income.
Importantly the document shows that a significantly high
proportion of properties receiving council tax discounts in
Scotland are situated in rural areas. Whilst acknowledging
the positive impact that some second home owners can bring
to rural communities by way of spending on goods and services,
the document is right to point out the largely detrimental
impact that second home ownership has on many of these communities.
The high levels of second home ownership in areas like the
Highlands have led to a chronic shortage of affordable housing
for locals and has contributed significantly to a housing
stock shortage as many second homes are not offered up for
rental to locals out of season.
The document is also correct to highlight the way in which
high rates of second home ownership have longer-term consequences
for many rural communities. Properties that are only occupied
for a short period during the year place a heavy burden on
these communities, threatening the viability of services such
as schools, post offices, bus services and local shops.
The consultation paper offers two options for change in relation
to council tax discounts for both second and long term empty
homes. Firstly, views are invited as to whether council tax
discounts be either reduced or removed for second homes as
well as long term empty homes. Secondly, the consultation
paper asks whether local authorities should be given a measure
of discretion in applying these changes to council tax discounts.
The consultation paper outlines two options for using the
income generated from eliminating or reducing council tax
discounts on second and/or long term empty properties.
Option A would see any additional revenue raised from the
removal/reduction of council tax discounts made available
for distribution across all Scotland's local authorities with
no corresponding cut in grant at national level. Option B
would see local authorities retain the extra revenue raised
from removing/reducing discounts, allowing local areas to
benefit directly from the increased tax contributions with
the income being used to address local priorities.
Responses
Second Homes
Q.1 Should the current 50% council tax discount be reduced
or removed for all second homes?
UNISON Scotland supports the proposal to reduce the current
50% Council Tax discount for all second homes. UNISON
Scotland believes that the present system of council tax discount
for second homes has contributed greatly to the lack of affordable
housing for local workers in many rural areas of Scotland. Properties
bought as second homes have taken housing stock from local people,
inflated local property markets and ensured that locals have
been unable to afford properties in their local area. UNISON
Scotland believes that a significant reduction in the current
50% discount will help to alleviate the housing supply problems
prevalent in many parts of rural Scotland.
Q.2 Should local authorities be given discretion to
reduce or remove the council tax discount for second homes within
their local areas?
UNISON Scotland acknowledges that in specific cases the mandatory
removal of council tax discount will cause undue hardship to
certain groups of workers i.e. workers living in tied accommodation
who have retained properties in the local community for their
retirement. UNISON Scotland believes that in cases such as these
local authorities should be given discretionary powers to alter
the level of council tax discounts. UNISON Scotland believes
it is a positive feature to have flexibility within the system
and giving local authorities discretionary powers will allow
for the fair treatment of exceptional cases.
Q.3 If yes to either question Q1 or Q2 what should the level
of discount be (if anything)?
UNISON Scotland believes that in exceptional cases where the
local authority has been asked to show discretion local circumstances
should dictate the appropriate level of discount but that the
level of discount should not exceed the current maximum of 50%.
In all other cases UNISON Scotland believes that in order to
act as an incentive to register second homes the maximum level
of discount should not exceed 10%.
Long-Term Empty Properties
Q.4 Should the current 50% council tax discount be reduced
or removed for all long-term empty homes?
UNISON Scotland supports a reduction in the current 50% Council
Tax discount for all long-term empty homes.
Q.5 Should local authorities be given discretion
to reduce or remove the council tax discount for long-term empty
homes within their local areas?
UNISON Scotland believes that action needs to be taken to address
the problem of long-term empty homes. UNISON Scotland believes
that reducing the number of long-term empty homes should take
precedence over using them as an additional source of income
for local authorities. UNISON Scotland believes that giving
local authorities discretionary powers to reduce discounts without
a requirement to also develop a strategy to tackle the problem
of empty homes would be counter productive. UNISON Scotland
believes that any proposal to allow the reduction of discounts
on long-term empty homes must be accompanied by a strategy to
bring these homes back into use.
Q.6 If yes to either Q4 or Q5 what should the level of discount
be (if anything)?
As noted in Q.5 UNISON Scotland believes giving local authorities
discretionary powers to reduce discounts only as part of a wider
strategy to tackle the problem of empty homes. As part of this
strategy UNISON Scotland believes that local circumstances should
dictate the appropriate level of discount but that the level
of discount should not exceed the current maximum of 50%.
Second Homes/Long Term Empty Properties
Q.7 Should there be any mandatory exceptions to the
reduction or removal of discounts on second or long-term empty
homes? If so, what?
UNISON Scotland believes that there should be no mandatory
exceptions to the reduction or removal of council tax discount
on second or long-term empty homes. UNISON Scotland believes
sufficient flexibility will be introduced into the system by
giving local authorities discretionary powers to alter discounts.
Q.8 Council tax benefit is not available for second homes.
Should local authorities have powers to grant relief on a case
by case basis (for example in the case of hardship)?
As noted in our reply to Q.2 UNISON Scotland believes it is
a positive feature to have flexibility within the system and
giving local authorities discretionary powers to grant relief
on a case by case basis will allow for the fairer treatment
of exceptional cases.
Q.9 Should income raised from reducing or removing council
tax discounts be spread across all local authorities in Scotland?
UNISON Scotland believes that the income generated from reducing
or removing council tax discounts should NOT be shared amongst
all local authorities in Scotland.
Q.10 Should income raised from reducing or removing council
tax discounts be retained locally? Why do you think this? If
the proceeds are to be retained locally the dwellings need to
be excluded from the council tax base for grant distribution
purposes. How can these dwellings be correctly identified? This
is particularly important if you believe there should be no
discount.
UNISON Scotland believes that each local authority should retain
the income generated from reducing or removing council tax discounts.
Those who live in the local authority area should receive the
benefit from the increased contribution to the local authority
tax base.
Local authority areas like the Highlands and Argyll and Bute
have a disproportionately high level of second home ownership
in comparison with other Scottish local authorities. In the
Highlands for example there are townships where over 50% of
the housing stock consists of second or holiday homes. This
has had a detrimental impact on these communities as regards
the availability of affordable housing for locals and has also
bought into question the future economic sustainability of these
communities. UNISON Scotland believes that local retention of
additional revenue should be ploughed back into local essential
services and used for local priorities.
UNISON Scotland acknowledges the administrative difficulties
likely to be faced by local authorities attempting to register
second/long-term empty homes if no incentive to register is
afforded to the owners of these properties. UNISON Scotland
therefore accepts that one possible solution would be to offer
a small discount of 10% to act as an incentive to register second
/long-term empty homes.
