Scotland’s escalating council tax premiums on second homes will do little to tackle housing shortages and risk becoming little more than a revenue-raising measure, according to one of the country’s largest property firms.
DJ Alexander has criticised the growing use of second-home surcharges by local authorities, arguing that the measures are unlikely to ease pressure on the housing market despite being introduced against the backdrop of Scotland’s housing emergency.
Councils across Scotland have adopted widely varying levels of second-home taxation. The Scottish Borders has introduced a 225% premium, while Edinburgh, Glasgow and Highland councils have imposed 300% charges. Midlothian has gone further still, introducing a 500% premium on second homes.
When combined with standard council tax bills, some second-home owners could face annual charges equivalent to 600% of the normal rate, with bills reaching almost £28,000 a year on higher-value properties.
David Alexander, chief executive of DJ Alexander Ltd, said: “The councils argue that these charges are aimed at increasing the stock of available homes in their area at a time when there are severe shortages. The fact that Midlothian only has 35 second homes and just two of them will be liable (the tax is graded and the maximum applies to homes owned for more than five years) for the 600% levy indicates that this is a largely performative tax aimed at appeasing voters while doing little to address the underlying housing emergency.”
“To add insult to injury the City of Edinburgh Council recently announced a public consultation to allow owners to share their views on the proposed tax increase. However, they gave the game away in the consultation document when they said: “while councillors will review the responses to this survey and the integrated impact assessment, it is expected that the increase in premium will now take effect from October.” This is a consultation in name only and is a tick box exercise to pretend that they want to hear from property owners with the reality that they simply don’t care.”
He added: “This is another piece of policymaking designed to look as if something is being done to address the current housing emergency without actually doing anything about it. The notion that pricing second homeowners out of the market will resolve the current housing shortage is laughable but is easier than actually doing something about the problem. The issue is the negative signal it sends about Scotland’s attitudes to wealth and investment. The real solution is to substantially increase the volume of housebuilding in all tenures so that there are more homes available to buy, to privately rent, and in the social housing sector. Anything else is simply tinkering at the edges.”
Read the orginal article: https://propertyindustryeye.com/agency-warns-punitive-second-home-taxes-wont-free-up-housing/?utm_source=rss&utm_medium=rss&utm_campaign=agency-warns-punitive-second-home-taxes-wont-free-up-housing
