The next item of business is a members’ business debate on motion S6M-17422, in the name of Ross Greer, on addressing the impact of second home ownership in Scotland. The debate will be concluded without any question being put. Please excuse my voice; I hope that it lasts the pace.
As members will be aware, we will resume business at 2 pm and we must leave sufficient time for staff to be able to clear the chamber. I therefore ask members to stick to the agreed speaking time that they have signed up to. I invite members who wish to speak in the debate to press their request-to-speak button.
Motion debated,
That the Parliament is concerned about the reported impact of the expansion of second home ownership on communities across Scotland; believes that the impact of second home ownership is felt more keenly in some communities than in others, including in areas of natural beauty; notes with concern reports that, in Loch Lomond and The Trossachs National Park, 5% of all houses are second homes or holiday lets, compared with 1% nationally, and that the figure is 12% in the Cairngorms National Park, rising to 20% in areas such as parts of Badenoch and Strathspey, that they account for over one third in Lochranza, on the Isle of Arran, and that in Coigach almost half of all homes are second homes or holiday lets; considers that recent changes to the additional dwelling supplement (ADS) and council tax have contributed to a reduction in second home purchases, with 2,455 fewer second homes bought in 2024 than in 2023; understands that the increased rate of ADS alone is expected to raise more than a quarter of a billion of pounds for public services, including the provision of affordable housing in 2025-26, and notes the view that further targeted measures, including potential tax reforms, should be considered to rebalance primary and second home ownership levels in communities where the housing crisis is particularly acute.
12:50
I thank all the members who signed my motion, giving us the opportunity to discuss the issue today, particularly those whom, admittedly, I harassed to make sure that I received the support of three different parties. We have entered a new era in which members’ business debates require the support of three parties rather than two due to the recent changes in the composition of the Parliamentary Bureau, so I am grateful to those whom I chased around corridors to make sure that they had seen my motion for signing it.
It was exactly a year ago today that the Parliament declared a housing emergency in Scotland. Laura, who is married and has four children aged four, five, 13 and 17, spoke to the BBC today, a year on from that declaration. Her family became homeless in June 2021 after being evicted by their landlord from a privately rented home. She told the BBC:
“Calling it a housing emergency and not doing anything about it isn't helping anyone.”
Late last year, 10,000 children were in temporary accommodation in Scotland. As of this spring, more children were in temporary accommodation in Edinburgh than in all of Wales. The crisis has no single cause. Sky-high rents, which are far outstripping wage growth, have made renting simply unaffordable for many people, particularly in the private rented sector. A lack of rights for tenants and poor enforcement against dodgy landlords have resulted in exploitation.
The Housing (Scotland) Bill, which was drafted by my Green colleague Patrick Harvie, will significantly improve that. If Parliament passes it, the bill will deliver rent controls and more rights for tenants. It will make it harder to evict tenants, which is absolutely key. One of the most important issues is that there are simply not enough affordable and available homes. However, there is little point in building more, particularly in the worst-affected communities, if those homes will not be available to those who need somewhere to live. In many areas, desperately needed houses are being bought and used as holiday homes or short-term lets.
Across Scotland, about 1 per cent of all homes are second homes. However, in Loch Lomond and the Trossachs, the figure is 5 per cent; in the Cairngorms, it is 12 per cent, rising to about 20 per cent in towns such as Braemar; in Lochranza on Arran it is 40 per cent; and in parts of Wester Ross, every second home is a holiday home or a holiday let. Those latter areas are not the only parts of the country where such housing now represents a majority of the whole of the local housing sector. That cannot be right. It drives up prices and reduces availability.
Mr Greer quite rightly identifies areas where there is a density of second home ownership for holiday homes, but does he also accept that there are many people, such as members of the Scottish Parliament, who, for the purposes of employment, for example, require a second home and are being penalised by the additional taxes?
I recognise that distinctions should be made between the different types of second home use. I do not think that that diminishes the impact that such use has on local housing supply or on people who are simply unable to find a first home—a home that they actually need to live in. I will come on to talk about the need for a more targeted and nuanced approach to the tax measures in this area.
The impact right now on people in those communities, particularly young people, is that they are often forced to leave the communities that they have grown up in because there is no home for them to live in as an adult. That is having a devastating impact in urban and rural areas.
We need only walk a few feet from the Parliament to see the key lock boxes and the impact that the issue is having in the centre of Edinburgh, but the situation is causing an existential crisis for rural and island communities. Those who have children or want to have children are being forced to leave because there is no home for them to raise their family in. As a result of that, schools in those communities close. Communities cannot continue without young families and children. I have heard people say that being in an area that is increasingly dominated by homes that sit empty for most of the year is like living in a museum or a theme park. Those areas their status and that feeling of being a real community. There is a clear pattern to areas with above-average second home ownership.
Among Scotland’s council areas, Argyll and Bute is at the top of the table of second home ownership, with 3,000 second homes and about 1,700 licensed short-term let premises. In Highland, there are about 3,500 second homes and 6,500 short-term lets. In North Ayrshire, there are 1,500 second homes and 800 short-term lets. Edinburgh is below average on second homes, as we would expect—in fact, the primary home of many second-home owners is in a city such as Edinburgh. However, Edinburgh is second only to Highland when it comes to short-term let licences that have been issued. Across Scotland, there are about 50,000 properties in total, with about 22,000 second homes and 27,500 licensed short-term lets—and that does not include short-term lets that are not yet licensed.
I lodged the motion to find out whether other parties and individual members agree that the balance across our housing sector is not right. If they agree that the balance is not right, what can we do about it?
Progress has been made. The Greens have delivered the power for councils to double council tax on second and holiday homes. We also doubled, from 4 per cent to 8 per cent, the additional dwelling supplement for people buying an additional property. As a result, there are 2,500 fewer second homes in Scotland than there were a year ago. I welcome the Scottish Government’s support for my amendment to the Housing (Scotland) Bill that seeks to lift the 200 per cent cap and to let councils set whatever rate they think is appropriate for their local situation.
The balance is still not right, and we need to go further. Short-term let licensing is helping, but more rigorous enforcement is required. However, the tax policy that we have set on holiday homes versus the one on short-term lets is somewhat contradictory. Holiday homes are—quite rightly—subject to double council tax; soon, the charge could be more than that, if my amendment is agreed to. However, short-term lets that are let out for at least 70 days a year are subject to non-domestic rates rather than council tax. Indeed, the owners are much more likely to pay nothing—they can go from a double council tax bill to a 100 per cent reduction on their non-domestic rates as a result of the small business bonus scheme. That is despite the fact that, in some communities, short-term lets are devastating the local housing market and depriving people of the opportunity to stay in the community in which they were raised—and the short-term let owners get a tax break to do that.
Will Ross Greer take an intervention?
If there is any time in hand, Deputy Presiding Officer, I will do so.
There is very limited time.
I apologise to the member. I think that I am supposed to come to a close in a moment.
The Parliament has already agreed that we are in a housing crisis across Scotland and that dramatic action is required to address it. However, there is no point in building homes to tackle the crisis, because they are being bought and used as second homes or short-term lets.
The issue is existential for our rural communities. Tax is a powerful tool to tackle it, but it is not our only tool. This afternoon, I look forward to hearing other proposals to escalate action. There are 10,000 children across Scotland in temporary accommodation, but there are 50,000 second homes and short-term lets. That is not right, but it is not inevitable, either. It can be fixed. Fixing it will require standing up to the wealthy. It will require saying and doing what powerful people do not like and what they will not want to hear. However, we owe it to those who need a home of their own to take that action now.
I remind members who wish to speak in the debate to check that they have pressed their request-to-speak button.
12:57
I thank Ross Greer for securing the debate for the chamber. As he and other members will know, this is an issue not only that has a massive impact on many parts of my region—some of which get a shout-out in his motion—but in which I take great personal interest as somebody with experience of struggling to find one secure home to live in and of all the trauma and negative impacts that go along with that.
It was pointed out that some MSPs have second homes. Personally, it is very difficult for me to live with the knowledge that I have a second home at this point. I do not own it, and it is necessary because I represent the Highlands and Islands in our national Parliament, which for some reason is not situated in the Highlands and Islands. However, as a formerly homeless person, having two places to live in is weird and unsettling for me, especially as I walk past the Crisis office when I come down to the Parliament in the morning. I often wish that other people felt half as uncomfortable as that about buying up half of the houses along the Caledonian canal.
As Ross Greer has said, there are different kinds of second home requirements. Many of my constituents have a second home in order to do things such as work in fragile communities to keep the school, general practitioner surgery, dentist or other services running. There are ways of supporting that kind of living situation while also targeting the more harmful kind.
Like most MSPs who represent areas of natural beauty, I suspect, I frequently receive representations from non-constituents who own property in my region to encourage me to resist policy and legislation that would make it harder for them to maintain their extra homes. There is a perception among many of those people that their ownership is harmless and normal. It might be becoming normal, but it is certainly not harmless. When properties lie empty, regardless of whether a cleaner is hired to look after them a few days a year, they are not housing anyone who lives, works or volunteers in the local area, or who otherwise contributes to it. In many rural and island areas, a few homes, a few families and a couple of children can make the difference to the sustainability or otherwise of a whole community.
During Covid, I was struck by the realisation of many people, who did not really notice before, that many homes around them did not contain neighbours. People who could just about manage before the lockdowns realised suddenly that there was no one down the road to help to pick up shopping, parcels or medication. There was nobody living within the radius that they were allowed to walk within—the properties around them were empty and they felt really alone.
Second homes are voids in a community. The fact that almost every council now charges their owners extra council tax is a step forward in addressing their lack of societal value, but Ross Greer is absolutely right that more can be done. Those purchasing extra homes should be aware of the impact and their responsibility to the community that they want to appreciate. They should be prepared to pay up to allow local services to continue without the staff who might have lived in their holiday home, and for national and local government and other housing providers to build other houses that can be lived in. I believe that if someone is not willing to pay extra towards all that, they have no business purchasing a second home.
Ross Greer is right that everyone should have a home before we start discussing the rights of people to own multiples. It is a house. We are talking about having a safe, secure place to live, and the ability to enjoy life and to be a productive member of society and of a community. Nobody should be sitting without a home, or leaving their community or passing up skilled work because there is not affordable housing available, while others are fighting for their right not to be taxed on their second, third or fourth home.
I call Meghan Gallacher.
13:01
I hope that you feel better soon, Presiding Officer.
One of my favourite comic strips when I was growing up was “The Broons”. “The Broons” is a staple in many Scottish households, with generations eagerly awaiting the next edition. It is published in the Sunday Post each week, and many people collect the annuals.
Why on earth am I talking about “The Broons” today? The Broons, fae Glebe Street, have their but and ben,
“a rare wee beauty spot wi a difference”.
It is a second home, which is the topic of the debate today. A but and ben, for those who are unfamiliar with the term, is a traditional Scottish residential house featuring two rooms—the but being the outer room or kitchen area and the ben being the inner room or living space.
The Broons, a typical working-class family who live in a tenement flat, have that second home in the Highlands, which is a relatively short distance from their home. The Broons belong to more than one community. Second home ownership is intrinsically Scottish.
The fictional Broons enjoy their weekends there and, although the younger Broons need some encouragement to enjoy their short breaks, the family have many an adventure while enjoying some time away with the family. One short comic strip section even shows how the family renovated the but and ben to bring the property back into use.
The point that I am making is that second homes are not always for the rich and wealthy. I hope that that is taken into consideration during the debate, because ordinary working Scots are also involved in second home ownership.
I agree that, historically, that has been a prominent part of Scottish life. A generation ago, my working-class family from Maryhill had a hut at Carbeth. However, does Meghan Gallacher acknowledge that, over the past 20 to 30 years in particular, the balance of second home ownership has skewed massively towards those in our society who are far wealthier? The prospect of owning a second home is now far out of reach for the vast majority of working-class Scots in this country.
That is why we need to look at the whole of our housing sector. We need to build more homes in order to tackle the housing emergency. We are not going to do it otherwise, because, as it stands, supply is completely outweighed by the demand of people who need homes. I think that we can all agree on that point.
Just before the debate, I had a look at what properties are available in certain areas, including north Ayrshire, which Ross Greer represents. I discovered, from looking at the website of just one selling company, that, on Arran—to take that as a silo—there are 81 properties available right now. Therefore, there are homes available, but we need to look deeper into the reasons why people are not buying in those areas. That is an important point to make in the debate that we are having today.
We need to look at the facts. Second homes equate to just 1 per cent of the total number of dwellings in Scotland. People tend to buy second homes in areas that they would like to move to permanently when they retire, which means that they contribute to not just one but two economies. We have had discussions about exemptions and all the rest of it. It is in the interests of people who have second homes to play an active role in supporting both the community in which they have their primary home and the one in which they have their secondary home.
The best way of ensuring that communities that have particularly high levels of second home ownership are able to thrive is to make sure that we have a sufficient supply of homes to meet demand. That is the biggest point that I can make today.
We also need to look at how we approach the housing sector from an ideological perspective, given the need to ensure that we have enough homes to tackle the housing emergency. If we put in place policies that stifle investment and development and constrain the provision of more affordable homes in the private rented sector or elsewhere, we will not be able to tackle the big problems that we face with housing today.
I will leave my remarks there, in case I get a telling-off about timing from the Presiding Officer.
13:06
I draw members’ attention to my entry in the register of interests: I previously owned property to rent.
I thank Ross Greer for bringing the debate to the chamber. I acknowledge the work that he has done on the impact of second home ownership and his fierce commitment to ensuring that we address the housing needs of people in Scotland. It was appropriate that he raised the fact that it has been a year since a housing emergency was announced.
Second homes are defined as homes that are furnished and lived in for at least 25 days in a 12-month period, but which are not someone’s main residence. My understanding—I am not an expert in this area; as members know, I cover the health brief—is that, as of September 2024, there were just over 21,000 second homes in Scotland. In my view, that represents a housing market failure, because the primary purpose of homes, as Emma Roddick pointed out, is that they are for living in. That failure, which has taken away the opportunity to provide housing for individuals, families and communities, is one that Scottish Labour believes that we need to reverse. We need to bring those homes back into use.
I think that Ross Greer’s motion fairly sets out the challenges of second home ownership. During my time in the Parliament, the sense that I have gained from debates, research papers and constituents—especially those who live in rural areas—is that those challenges are very real.
Of course, when we read the research, we realise that second home ownership is a multifaceted issue—of course it is. Some people say that there are benefits associated with the spend that is connected to second home properties. Some argue that it improves the local economy and keeps resources available for people who live locally. However, it is fair to say that the most compelling evidence to push Parliament to tackle some of the issues comes from local testimony.
As we have heard, there are concerns that a high concentration of second homes causes an increase in house prices and rents and reduces the housing supply for local people. A lack of affordable housing affects not only individuals and communities but local businesses that want to attract workers.
Very importantly, a lack of affordable housing also affects the recruitment of public sector workers. I have strong evidence of that from the Borders area of my South Scotland region. Trade unions have told me that people are not coming to work in the area or are having to travel a long distance, which sometimes involves a journey of an hour or more, to get to their work. That is not sustainable. The Health, Social Care and Sport Committee has heard compelling evidence on the issue, in oral evidence and on a visit to the islands. The health boards have described the situation as a crisis for service delivery. It is a very important issue.
I have heard from my own constituents that empty second homes cause a lot of frustration in communities, particularly when people find it difficult to rent or purchase a home within their own community. We see that every day. People want to live within their community, near their network and want to bring up their own children near to the place where they grew up. Those personal stories mean that we have to take the issue seriously and take a robust approach to tackling it.
I am about to run out of time, but I reassure Mr Greer that Scottish Labour really wants to look at the issues that he mentioned in his motion. I know that you will have spoken to my colleague Mark Griffin about that. We want to see tax reforms to ensure that we can turn that around in Scotland.
I remind members always to speak through the chair.
13:10
I join colleagues in thanking Ross Greer for bringing this debate to the chamber. During his time holding the finance brief, he has shown the fierce determination that Carol Mochan described and has worked to find ways to use tax as a tool to deliver a much fairer and more equal society. He also acutely understands the housing pressures that are faced in many areas of Scotland, particularly within the Loch Lomond and the Trossachs national park, which lies in both of our parliamentary regions and is also where I now live.
The debate is about housing but it is also about poverty and inequality. There is a need to use all possible levers, including planning, licensing and taxation, to ensure the health of our communities.
In hotspots across my region, increasing numbers of family homes are being bought up by people from outwith those communities for use as second homes or to rent out as businesses. That is not the 1950s picture that Meghan Gallacher pointed to: we are seeing increasing and intensive ownership of second homes.
Our communities welcome people who come to make their lives in permanent homes, helping to build a better future for all and committing to communities, but we are seeing more second homes artificially inflating the housing market and pricing out locals, particularly families who are taking their first steps in the housing market. Adult children often have to stay in the family home while saving for a deposit or even to move out of their community, away from friends and family, at a stage in life when support networks are incredibly important.
I also see older people struggling. They can become trapped in unsuitable housing because there are few properties available to downsize into and they sometimes end up in precarious tenancies in poorly serviced park homes. There are few options for people in many rural communities.
It is in those hotspots that we can most clearly see the impact of second home ownership. Shops close because of a lack of regular custom, schools have dwindling numbers of young people, leading to their eventual closure, and residents no longer have neighbours.
In Highland Perthshire this week, in a move that I warmly welcome, the council finally agreed to create Scotland’s third short-term lets control area. That is one intervention to address just one part of the problem. There was a remarkable response to that council decision from the chief executive of the Association of Scotland’s Self-Caterers, who said that a short-term let delivers
“three times the economic output of a private home.”
That comment speaks volumes about the many people who are struggling right now, including in my community, to find a home in rural Scotland. It also raises serious questions. What is more important, a place to live or wealth generation? Who feels the benefit of that wealth? Does it stay in the community or does it go to a remote owner or to a letting agency? Who will work to clean and service those lets if there is a lack of permanent housing for local people?
There is a balance to be struck between being a place to live and simply a place to visit. Holiday lets help to make tourism happen but, alongside second homes, their proliferation can lead to a tipping point where communities become effectively hollowed out. Members have already pointed to many examples, with Ross Greer saying that many people feel as though they are living in a museum or a theme park and Emma Roddick pointing to the impact on her community. I point to Elie and Earlsferry, an area that has the highest percentage of short-term lets in Fife, with almost one in five houses being let out—a figure that does not even account for private second homes.
I welcome the opportunity to have this debate. Every community has its own different and complex set of housing issues to deal with, but all the tools in the box are needed to create a better balance of housing, particularly in rural Scotland. We should not be afraid to give communities, councils and national parks the powers that they genuinely need to achieve that.
13:14
Although I accept that some of what has been said in this debate is valid and that there are issues with the concentration of second homes in some parts of Scotland, I want to dwell on some of the unintended—or perhaps intended—consequences of some of the fiscal measures that have been taken in respect of second home ownership. I will give a couple of examples that the minister can take away to consider with the Cabinet Secretary for Finance and Local Government how the taxes, if they are to remain, could be better applied.
There are two reasons for such taxes. One is ideological and the other is that the Government needs to get money wherever it can find it. The same goes for local authorities, which, given the power to levy a 100 per cent supplement on council tax, will do so because of the financial pressures that they face as a result of the SNP’s year-on-year real-terms cuts to their finances.
The approach that the Government is adopting is a blunt instrument. It is indiscriminate and arbitrary, and it is pulling into additional tax measures people who I honestly do not believe should be caught in that trap.
Will the member take an intervention?
I am afraid that I have only four minutes and I have some ground to cover.
The first specific case that I will mention is that of my constituent Ruth Campanile, who works at the Old Clubhouse in Gullane, which is in the minister’s constituency. Ruth lives on the premises of the pub, which is owned by her brother. East Lothian Council has now determined that the home that she will move to soon, when she retires, is a second home and it will therefore accrue a double council tax. That is something that she cannot afford. The legislation still provides for councils to give a 50 per cent discount for a job-related dwelling, but East Lothian Council is not willing to apply that discount.
I say to the minister that there are reasons why people in his constituency of East Lothian and elsewhere will require a second home. Recently, I spoke to a consultant who works in the national health service between two hospitals. Because rents have gone up in so many areas, he decided to buy a second home so that he could contribute to healthcare in two remote parts of Scotland. The consequence of that was that the property that he bought accrued the additional dwelling supplement, which is now 8 per cent. That meant considerable expenditure for him to be able to do his job in two places.
The positions that are faced by council tax payers and those who buy homes is similar in that the tax measures are indiscriminate and blunt and they are catching in the tax system people who are not traditional second home owners—that is, holiday home owners. People who own holiday homes are also being pulled in.
I will give another example of a resident of Gullane in the Minister for Housing’s constituency who has owned a second home there for many years. The owner inherited the property and he and his wife are not wealthy people. They spend time in the south of England so that they can be with their grandchildren but, ultimately, their hope would be to move to Gullane. I say to the minister that, if that property came on to the market, I very much doubt that a first-time buyer in East Lothian would buy it. The couple concerned are there pretty regularly—at least once a month. The minister will know that area very well. If the couple sold the property, I suspect it would not be a to local East Lothian resident. The chances are that it would be to a wealthy American golfer who, rather than visiting once a month, might visit only once a year.
Will the member take an intervention?
I am afraid that I do not have time.
Mr Hoy is about to conclude.
Ultimately, the issue is that those who cannot afford to retain a second home are forced to sell up and they often sell to wealthy second home owners who are prepared to cough up.
If we are to maintain the taxes, I urge the minister to look at them again. They are indiscriminate and they are catching people who I believe should not be caught by them. I hope that the minister will think again when the Government reforms both ADS and council tax.
13:19
I thank Ross Greer for securing the debate, and I am grateful for the opportunity to speak this afternoon.
I believe that every single person deserves a safe, secure and stable place to call home—not a commodity or an investment, or a holiday retreat, but a home. We are facing a housing emergency in Scotland. That crisis is the result of decades of political choices that have privileged private wealth over public good; property rights over the right to a home; and profit over people. Nowhere is that clearer than in the spread of second homes across Scotland—homes that stand empty for most of the year while local people are pushed out or priced out.
More than 1.5 million people are living in overcrowded, dangerous, unstable or unaffordable housing. More than 16,000 households are in temporary accommodation, including—as we have heard—more than 10,000 children. Behind each of those numbers is a human being: those are families who are split between relatives’ sofas; children who are growing up without a permanent address; and people who are being pushed to the edges of communities that should be theirs.
Those families, and others, worry constantly about where they will sleep tonight, next week and in the future. Yet, across our country, homes are being bought not to house people, but to house profits—to sit empty for most of the year in order to cater for short-term stays that hollow out communities. It cannot be right that, in some places, more than half of all homes are second homes or holiday lets. That is not just unsustainable—it is unjust.
It is clearly a systemic issue. From Aberdeenshire to Angus and from the Highlands to Dundee, homes are being taken out of the hands of people who need them and turned into playthings for the wealthy, and that has just been allowed to happen. The long shadow of right to buy still looms, and housing has been treated as a market, not a human right, which is fuelling inequality and driving up child poverty.
I say in response to some of Craig Hoy’s comments that the housing market is broken, and that is why the local family whom he mentioned would not be able to buy a home in East Lothian. It is not because of anything but the broken housing market, to which his party has contributed.
Will the member give way?
I am not going to take an intervention.
Now, entire towns and villages are becoming ghost towns in the off season, and their school shops and services are under threat because their communities are hollowed out. We must change course.
The recent increase in the additional dwelling supplement and the ability for councils to raise council tax on second homes is welcome, and it is making a difference. In 2024, 2,455 fewer second homes were bought than in the previous year, and the additional revenue—more than a quarter of a billion pounds—can be redirected to affordable housing.
However, that must be just the start: we need bolder, braver and more compassionate action. We must consider reforms such as Norway’s boplikt law, which requires that homes be lived in year round. We need to rebalance ownership in favour of those who actually live and work in our communities.
Homes are not just bricks and mortar—they are the foundation of health, dignity, community and hope. We owe it to every family who is still waiting, every child who is still in temporary accommodation and every village that is watching its future slip away to act with urgency and compassion.
Housing is a human right, not a commodity. It must never be a plaything for the rich—a bolthole for the few while the many go without. Homes should be real homes—places of belonging, community and care, not investments or profit generators, and certainly not just weekend retreats for those who can afford multiple properties.
Homes are for living in, not for hoarding or speculating in, or for escaping to. Homes are for people.
I call the minister, Paul McLennan, to respond to the debate.
13:23
I am grateful to the member for bringing the debate to the chamber. Our “Housing to 2040” strategy sets out an
“aim ... for everyone to have a safe, high-quality home that is affordable and meets their needs in the place they want to be.”
While it is a bold vision, we need to recognise that, fundamentally, that is a basic principle. Today’s debate has highlighted a range of experiences and views both for and against second home ownership, and has emphasised the gap in our society between those with wealth and those without.
Housing is both a social and economic good. It is critical to supporting health, wellbeing, life chances and job prospects, tackling child poverty and driving economic growth. We have a strong track record on building new affordable homes, but we need to do more.
It is right to acknowledge that ownership patterns of existing housing are an important factor among the challenges that we face in achieving our aim. In recent decades, the potential to make money from residential housing has shifted and expanded, and those with disposable income have looked to opportunities with the growth of the short-term let sector and rising trends in housing markets.
That is why we have said that residential properties need to be prioritised as homes for living in, not for accumulating wealth. At the same time, we recognise that second homes, if used for tourism, may bring benefits for local economies, as not all second homes may be suitable for year-round living. We continue to work with local authorities to improve access to reliable data. That is an important point.
Ross Greer is right that 1 per cent of all homes in Scotland are second homes but, as we have heard today, there are wide variations across local authority areas, with clear concentrations in rural locations. I will touch on that in a second. We believe that local areas are therefore best placed to make decisions about how to find the right balance to ensure the availability of homes to meet local needs and community sustainability. We have delivered against commitments in our “Housing to 2040” strategy to help local authorities to do that by providing powers and tools to make the best use of the existing housing in their areas.
Of course, changing ownership patterns will not happen overnight, and doing so requires a range of mechanisms. We have delivered that through taxation by giving local authorities the power to set policy on council tax on second homes, which may involve charging a premium of up to 100 per cent in all or part of the council area.
Will the minister take an intervention?
Yes, if it is very brief.
Will the minister undertake to look into the issue of second home ownership and council tax for employment purposes? A briefing from the Scottish Parliament information centre says that under schedule 1 of the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013, councils can still apply a 50 per cent discount where the property is occupied for employment purposes. If that is the case, will the minister remind councils of their obligation to do so?
That 50 per cent discount is mandatory. I am aware of the case of Ms Campanile, which Craig Hoy mentioned, and I am engaging with the local authority on that point. It is mandatory. If there are examples of the discount not being used, I ask Mr Hoy to keep in touch with me.
Part of the revenue that is raised from the council tax on second homes must be used for affordable housing, and I will continue to press local authorities to do that.
Will the minister take an intervention?
Again, yes, if it is very brief.
I use my intervention as an opportunity to reassure Craig Hoy that the minister, the cabinet secretary and I are working on a further amendment to the Housing (Scotland) Bill, which, alongside lifting the cap on council tax, would create statutory guidance for local authorities to address the kinds of scenario that he has talked about. Clearly, for example, NHS locums should not be charged double council tax for working in a fragile community.
I thank Ross Greer for that and for his work so far with us on that point.
I mentioned the increase from 6 per cent to 8 per cent in the amount of additional dwelling supplement that is paid when purchasing additional residential property of a value of more than £40,000. That will help first-time buyers and home movers to compete with second home buyers and buy-to-let investors. On top of that, as has been mentioned, it will raise additional revenue to support Scotland’s national priorities. The Scottish Fiscal Commission has estimated that it will raise an additional £32 million in 2025-26, which will take total estimated ADS revenues up to £258 million.
Local authorities may also designate short-term let control areas. Mark Ruskell spoke about the work of Perth and Kinross Council, which I welcome, to manage the concentration of short-term lets through the planning system. Those are powers that local authorities have.
I will mention a couple of key things from members’ contributions. Ross Greer mentioned empty homes. This year, £2 million, I think, has been invested in the Scottish Empty Homes Partnership to continue to reduce the number of empty homes. Investment from the Government of £3.7 million has brought 11,000 empty homes back since 2010.
Meghan Gallacher talked about the availability of new housing, and we are consulting at the moment on exemptions for such housing.
Carol Mochan mentioned key workers. We heard about the work that Ross Greer, the cabinet secretary and I have been talking about. There is also the £25 million key worker fund. Again, we are encouraging local authorities to come forward on that.
Through those measures, as has been said, there has been a reduction in the number of second homes. Together with investments in affordable housing and progress to deliver affordable homes, we are taking action on homelessness and temporary accommodation, as well as the activity that I mentioned to drive down the number of empty homes.
In concluding, I emphasise that we have just set out a programme for government commitment to remove the legislative constraint on the level of the council tax premium that can be applied to second and long-term-empty homes.
Many issues that have been raised by Ross Greer and others relate to amendments that are proposed for the Housing (Scotland) Bill. The Government is working with Mr Greer on his amendment about council tax premiums ahead of stage 3. I am also willing to work across the parties to consider ways to enable the housing market to operate fairly across Scotland, so that it provides housing options that are affordable, and choices in all communities.
That concludes the debate.
13:29 Meeting suspended.Previous
First Minister’s Question Time