Chamber and committees

:The cost of homes in some parts of Scotland has risen exponentially, particularly since Covid, and we all understand the reasons for that. That is why investment in the affordable housing supply programme is so critical. More than £900 million will be invested through the 2026-27 budget in the affordable housing supply programme, which is a record investment, while £4.9 billion will be invested throughout the spending review period. Where capital is in short supply, we have prioritised affordable housing.

We want to work with community housing providers, which can with very small numbers of affordable homes make such a difference in some of the villages in the Highlands and Islands. In those communities, building a single-digit number of new homes would be transformational. Community housing organisations do a tremendous job of navigating tricky things such as land ownership and crofting in order to find available land to take projects forward.

It is not all about massive house-building programmes in urban Scotland; some of it is about small-scale but crucial developments in some of our smaller communities.

:Absolutely. We would expect that to be enforced by ensuring that everyone who is operating a short-term let is operating with a licence. I can say that the first unlicensed short-term let operator has been convicted and fined, and we understand that other cases are being taken forward through the courts. That will send out a message that, if you convert your property into a short-term let, you must then abide by the rules. That is what we would expect.

I hope that a number of properties will be brought into long-term letting arrangements. It is up to individuals to decide what they do with their property, ultimately, but we can incentivise and disincentivise certain actions. We would clearly like more properties to be brought into long-term rental use. Do you wish to add anything, James?

:The Barclay review identified that loophole and the requirement for a minimum number of actual lets was brought in to avoid it.

:We will see whether we can provide that information; I do not have it in front of me. It may be here, but unless anybody has it to hand, we can provide it later.

:My understanding—I am just trying to find the information in my notes—is that there is a grace period, if you like, for things such as repairs and redecoration. I think that it is six months—is that correct?

:The guidance will be clear that councils have to consider proportionality and fairness in individual circumstances, and there will be clear criteria on what that may relate to. The statutory guidance will be critical to ensuring that people are treated fairly and that the circumstances are taken into account.

James Messis may want to add something on that.

Good morning, convener, and thanks for the opportunity to speak to the draft regulations.

The policy was first explored in partnership with local government through the joint working group on council tax reform, in keeping with the spirit of the Verity house agreement. That work was informed by the joint public consultation on the council tax treatment of second homes and long-term empty homes, which sought views on increasing flexibility for councils and received significant engagement from stakeholders and members of the public.

Taken together, that engagement recognised that decisions about local taxation and housing pressures should be informed by collaboration and evidence, while, ultimately, respecting the democratic accountability of local authorities.

The regulations that are before the Parliament deliver on a key priority of the Government: to deliver a fairer housing and taxation system. They will give effect to powers that were created by the Housing (Scotland) Act 2025. That act amended the legislative framework that governs council tax variation for unoccupied dwellings and provided the opportunity to remove the previous statutory cap on the level of premium that local authorities may apply to second homes and long-term empty homes.

The regulations have two principal objectives. First, they establish and maintain a national default premium of 100 per cent for second homes and long-term empty homes. Secondly, they remove the previous statutory cap and empower councils to determine the appropriate premium in their own area—whether that is to apply the 100 per cent default, increase the premium above that level, reduce it, apply no premium at all or offer a discount. In doing so, the regulations place decisions about the balance of housing use firmly in the hands of councils, which are best placed to assess their own housing markets and community circumstances.

Further, the Housing (Scotland) Act 2025 enables the Scottish ministers to issue statutory guidance to which local authorities must have regard. Guidance is currently being agreed between the Scottish Government and the Convention of Scottish Local Authorities. It aims to support a consistency of approach, ensure proportionality and highlight circumstances in which applying a premium may not advance the policy intent.

It is important to emphasise that this is an enabling instrument. It does not mandate any increase in council tax. Any decision to vary the premium will rest with individual local authorities, which are democratically elected and accountable to their own communities.

Housing markets differ significantly across Scotland. The presence and impact of second homes and long-term empty homes varies between urban, rural and island communities. In some areas, high levels of unoccupied dwellings can affect housing availability for permanent residents and place pressure on local supply. In others, local dynamics may differ. The regulations recognise that local authorities are best placed to assess their own housing pressures, affordability challenges and sustainability considerations. The changes will put councils front and centre in determining how council tax can support the effective use of housing stock in their area.

Alongside that flexibility, important safeguards remain in place. Existing statutory exemptions and discounts are unaffected by the regulations. In addition, guidance will make it clear that councils should act proportionately and in line with the purpose of the legislation, including in circumstances in which a dwelling is unoccupied because a liable person is required to live away from home because of their employment in the armed forces or healthcare. The intention is to ensure that greater local flexibility is balanced with fairness and recognition of legitimate circumstances.

In summary, the regulations deliver on the powers that were created by the Housing (Scotland) Act 2025 to remove constraints, maintain a clear national framework and trust local authorities to make accountable decisions about how council tax supports housing policy in their communities. They are enabling, proportionate and grounded in earlier partnership work with local government.

:As Fiona Hepburn outlined, the policy builds on the existing discretionary powers of local authorities to take account of individual circumstances, which may be particular to that local authority area. The issue of seasonal workers has been mentioned, and there may be other issues. We would expect local authorities to use their discretionary powers. However, we will pick that issue up and ensure that it is specifically referenced in the guidance, if it is not already.

As Fiona Hepburn said, we will also monitor the situation. If we feel that a local authority is not using its discretionary powers in a way that is appropriate—for example, in relation to something such as the specific case that Meghan Gallacher raises—we have the opportunity to strengthen the statutory guidance, which is exactly that: it is guidance on a statutory footing. Therefore, it has to be taken account of by the local authority, and cannot simply be set aside.

I give Meghan Gallacher those assurances that there will be safeguards in relation to those particular circumstances.

:There will be a level of information collected through the work that local authority empty homes officers are doing—I think that is the correct term for them. There will be some information on the reclassification of a number of homes for council tax purposes. Over time, it will be important to track whether the regulations that are now before us have a further impact beyond what is already in place.

:When do we intend to publish the guidance, James?