Meeting of the Parliament

Meeting date: Wednesday, December 13, 2023

Official Report 1079KB pdf

Parliamentary Bureau Motions

The next item of business is consideration of Parliamentary Bureau motion S6M-11642, on approval of a Scottish statutory instrument. I call George Adam, on behalf of the Parliamentary Bureau, to move the motion.

Motion moved,

That the Parliament agrees that the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 [draft] be approved.—[George Adam]

I rise to speak against the motion on the draft Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023.

When the First Minister announced the policy in April, he stated that it would improve the availability of sustainable long-term housing opportunities. In the Local Government, Housing and Planning Committee’s deliberations, we have heard very little evidence to suggest that the policy will provide any additional homes or that it will encourage people who have second homes in Scotland to change how they use their properties.

There are also significant concerns about the policy in relation to potential behavioural change. The committee heard that there has been a decline in second home ownership and that there are, in Scotland, existing taxes on second homes, including the additional dwelling supplement, which is added to land and buildings transaction tax.

Witnesses to the committee also explained that they believe that the regulations could have unintended consequences. In particular, second home owners might instead increase the availability of their properties for holiday letting in order to become eligible for non-domestic rates, instead of paying council tax. The small business bonus provides relief from NDR of up to 100 per cent, which means that, in practice, many holiday-let owners currently pay no council tax or NDR.

We are all acutely aware of the pressures that local government in Scotland faces after a decade of SNP and Green ministers targeting them with budget cuts. Many councils will see the potential of a new revenue stream to fill that black hole, assuming that we see no behavioural change taking place. However, the policy presents no expectations on how councils should use that additional income—for example, in applying it to providing more affordable housing and addressing the housing crisis in Scotland.

Therefore, at decision time, the Scottish Conservatives will not support the motion.

The regulations will deliver a key priority for the Government with regard to fairer housing and taxation systems. Both policies have been developed in partnership with local government, through the joint working group on sources of local government funding and council tax reform. In the spirit of the Verity house agreement, the regulations seek to empower local authorities to make decisions about the council tax treatment of second homes in order to determine the balance in use of housing to meet local needs.

In that way, councils would have discretion to apply to second homes either a discount of up to 50 per cent or a premium of up to 100 per cent. That recognises that local authority areas differ and that the impact of second homes across the country is disparate. What might cause pressures in some communities could provide benefit to others. Those decisions should be for councils, based on the market conditions and economic tolerances in their areas.

I note that the UK Government has recently legislated to provide councils in England with the same 100 per cent council tax premium on second homes. I have heard a lot of surprising things in the chamber, but it was intriguing to hear Miles Briggs adopting a more extreme position than his Westminster counterparts.

The instrument also allows councils to grant a six-month grace period with regard to the 100 per cent empty homes premium for new owners of empty properties who are undertaking repairs and renovations. Local authorities will have discretion to extend that six-month grace period. That is aimed at incentivising reoccupation of empty homes and at preventing the empty home council tax premium from becoming a deterrent to new ownership. We have committed to establishing joint best practice guidance with local government to ensure that all councils are aware of the flexibilities in relation to those policies.

The instrument will put councils front and centre in making decisions about the council tax treatment of second and empty homes in their areas. I hope that members will agree with the Government on that this evening.

Thank you, minister. The question on the motion will be put at decision time.

The next item of business is consideration of Parliamentary Bureau motion S6M-11643, on designation of a lead committee. I ask George Adam, on behalf of the Parliamentary Bureau, to move the motion.

Motion moved,

That the Parliament agrees that the Delegated Powers and Law Reform Committee be designated as the lead committee in consideration of the Judicial Factors (Scotland) Bill at stage 1.—[George Adam].

The question on this motion will be put at decision time.