Council Tax premium for second homes
At the recent meeting of Cabinet it was agreed that from 1 July 2024, Council Tax charges for second homes will be increased with the introduction of a premium of 100%, which means that the standard charge will double.
This decision was based upon the results of a joint Scottish Government/ COSLA public consultation held last year and subsequent new legislation – The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendments Regulations 2023, which provides new discretionary powers for local authorities.
From 1 April 2024, the new powers will allow local authorities to charge a premium of up to 100% on second homes. This legislation means that second homes and long-term empty properties are treated the same and removes any financial incentive to switch between uses, reducing the potential for levy avoidance.
Within East Ayrshire, long-term empty properties, which are empty for more than 12 months, are billed at full Council Tax rate plus a premium of 100%. Following discussions and a proposal put forward by Councillor Barry Douglas to amend the commencement date of the premium from 1 October 2024 to 1 July 2024; second homes will now be billed at the same rate from 1 July 2024, giving the owners of affected properties a three month grace period before the 100% premium is introduced.
There will be two exceptions to the introduction of the 100% premium. If a property is purchased by a new owner and they can produce evidence that it is undergoing repairs or renovations then the premium will not be applied for up to six months. Also, if a property has been previously long-term empty and is purchased by a new owner, the maximum period where the premium will not be applied will increase from three to up to six months.
Councillor Douglas Reid, Leader of the Council said: “The introduction of the Second Homes premium aims to prioritise homes for living in and increase housing availability by encouraging owners to make their property available for use as a lived in home through sale or rent. It also gives local authorities the ability to exercise flexibility and discretion when considering local housing needs and services.
“This decision will generate a limited amount of income income for the Council at a time when very difficult decisions are having to be made around budgets, although the driver for the introduction of the premium is to encourage a greater use of properties. Cabinet agreed that this additional income would not be ring-fenced and can be spent on local priorities.
“The Council Tax team will now write to the affected owners advising of the 100% premium charge that will be implemented from 1 July 2024.”