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Council Tax on Second and Long -Term Empty Homes

UNISON Scotland's response to the Scottish Executive Consultation document "Council Tax on Second and Long -Term Empty Homes"

February 2002

Executive summary

    • UNISON Scotland welcomes the opportunity to respond to the consultation paper on Council Tax discounts on Second Homes and Long -Term Empty Homes.
    • UNISON Scotland is pleased that the executive is looking at the important issue of the impact of second and long-term empty homes.
    • UNISON Scotland supports the proposal for a reduction in the current 50% council tax discount for all second homes.
    • UNISON Scotland supports the proposal for a reduction in the current 50% council tax discount for long -term empty properties.
    • UNISON Scotland supports allowing Local Authority's discretion to alter the level of council tax discount on second homes and long -term empty properties.
    • UNISON Scotland believes that individual local authorities should retain the income generated by reducing council tax discounts.

Introduction

UNISON is Scotland's largest trade union representing 150,000 members working in the public sector. More than 100,000 of our members work for local authorities and voluntary organisations in Scotland providing vital services to the community. Many members of UNISON Scotland are directly affected by housing supply problems created by second home ownership and long term empty properties in parts of rural Scotland.

This paper constitutes UNISON Scotland's response to the consultation document issued by the Scottish Executive entitled: Council Tax on Second and Long -Term Empty Homes.

 

Background

The consultation document outlines the Scottish Executives proposals for changes to the local authority tax base, in particular proposals to reduce or remove council tax discounts for second and long term empty homes.

The document outlines the current circumstances where these discounts apply and notes that in Scotland there are over 60,000 properties which are currently in receipt of a second home 50% council tax discount. The document notes that this equates to around 3% of all properties in Scotland, a potential contribution of £25 million per annum to Scottish local authority income.

Importantly the document shows that a significantly high proportion of properties receiving council tax discounts in Scotland are situated in rural areas. Whilst acknowledging the positive impact that some second home owners can bring to rural communities by way of spending on goods and services, the document is right to point out the largely detrimental impact that second home ownership has on many of these communities.

The high levels of second home ownership in areas like the Highlands have led to a chronic shortage of affordable housing for locals and has contributed significantly to a housing stock shortage as many second homes are not offered up for rental to locals out of season.

The document is also correct to highlight the way in which high rates of second home ownership have longer-term consequences for many rural communities. Properties that are only occupied for a short period during the year place a heavy burden on these communities, threatening the viability of services such as schools, post offices, bus services and local shops.

The consultation paper offers two options for change in relation to council tax discounts for both second and long term empty homes. Firstly, views are invited as to whether council tax discounts be either reduced or removed for second homes as well as long term empty homes. Secondly, the consultation paper asks whether local authorities should be given a measure of discretion in applying these changes to council tax discounts.

The consultation paper outlines two options for using the income generated from eliminating or reducing council tax discounts on second and/or long term empty properties.

Option A would see any additional revenue raised from the removal/reduction of council tax discounts made available for distribution across all Scotland's local authorities with no corresponding cut in grant at national level. Option B would see local authorities retain the extra revenue raised from removing/reducing discounts, allowing local areas to benefit directly from the increased tax contributions with the income being used to address local priorities.

 

Responses

Second Homes

Q.1 Should the current 50% council tax discount be reduced or removed for all second homes?

UNISON Scotland supports the proposal to reduce the current 50% Council Tax discount for all second homes. UNISON Scotland believes that the present system of council tax discount for second homes has contributed greatly to the lack of affordable housing for local workers in many rural areas of Scotland. Properties bought as second homes have taken housing stock from local people, inflated local property markets and ensured that locals have been unable to afford properties in their local area. UNISON Scotland believes that a significant reduction in the current 50% discount will help to alleviate the housing supply problems prevalent in many parts of rural Scotland.

Q.2 Should local authorities be given discretion to reduce or remove the council tax discount for second homes within their local areas?

UNISON Scotland acknowledges that in specific cases the mandatory removal of council tax discount will cause undue hardship to certain groups of workers i.e. workers living in tied accommodation who have retained properties in the local community for their retirement. UNISON Scotland believes that in cases such as these local authorities should be given discretionary powers to alter the level of council tax discounts. UNISON Scotland believes it is a positive feature to have flexibility within the system and giving local authorities discretionary powers will allow for the fair treatment of exceptional cases.

Q.3 If yes to either question Q1 or Q2 what should the level of discount be (if anything)?

UNISON Scotland believes that in exceptional cases where the local authority has been asked to show discretion local circumstances should dictate the appropriate level of discount but that the level of discount should not exceed the current maximum of 50%.

In all other cases UNISON Scotland believes that in order to act as an incentive to register second homes the maximum level of discount should not exceed 10%.

Long-Term Empty Properties

Q.4 Should the current 50% council tax discount be reduced or removed for all long-term empty homes?

UNISON Scotland supports a reduction in the current 50% Council Tax discount for all long-term empty homes.

Q.5 Should local authorities be given discretion to reduce or remove the council tax discount for long-term empty homes within their local areas?

UNISON Scotland believes that action needs to be taken to address the problem of long-term empty homes. UNISON Scotland believes that reducing the number of long-term empty homes should take precedence over using them as an additional source of income for local authorities. UNISON Scotland believes that giving local authorities discretionary powers to reduce discounts without a requirement to also develop a strategy to tackle the problem of empty homes would be counter productive. UNISON Scotland believes that any proposal to allow the reduction of discounts on long-term empty homes must be accompanied by a strategy to bring these homes back into use.

Q.6 If yes to either Q4 or Q5 what should the level of discount be (if anything)?

As noted in Q.5 UNISON Scotland believes giving local authorities discretionary powers to reduce discounts only as part of a wider strategy to tackle the problem of empty homes. As part of this strategy UNISON Scotland believes that local circumstances should dictate the appropriate level of discount but that the level of discount should not exceed the current maximum of 50%.

Second Homes/Long Term Empty Properties

Q.7 Should there be any mandatory exceptions to the reduction or removal of discounts on second or long-term empty homes? If so, what?

UNISON Scotland believes that there should be no mandatory exceptions to the reduction or removal of council tax discount on second or long-term empty homes. UNISON Scotland believes sufficient flexibility will be introduced into the system by giving local authorities discretionary powers to alter discounts.

Q.8 Council tax benefit is not available for second homes. Should local authorities have powers to grant relief on a case by case basis (for example in the case of hardship)?

As noted in our reply to Q.2 UNISON Scotland believes it is a positive feature to have flexibility within the system and giving local authorities discretionary powers to grant relief on a case by case basis will allow for the fairer treatment of exceptional cases.

Q.9 Should income raised from reducing or removing council tax discounts be spread across all local authorities in Scotland?

UNISON Scotland believes that the income generated from reducing or removing council tax discounts should NOT be shared amongst all local authorities in Scotland.

Q.10 Should income raised from reducing or removing council tax discounts be retained locally? Why do you think this? If the proceeds are to be retained locally the dwellings need to be excluded from the council tax base for grant distribution purposes. How can these dwellings be correctly identified? This is particularly important if you believe there should be no discount.

UNISON Scotland believes that each local authority should retain the income generated from reducing or removing council tax discounts. Those who live in the local authority area should receive the benefit from the increased contribution to the local authority tax base.

Local authority areas like the Highlands and Argyll and Bute have a disproportionately high level of second home ownership in comparison with other Scottish local authorities. In the Highlands for example there are townships where over 50% of the housing stock consists of second or holiday homes. This has had a detrimental impact on these communities as regards the availability of affordable housing for locals and has also bought into question the future economic sustainability of these communities. UNISON Scotland believes that local retention of additional revenue should be ploughed back into local essential services and used for local priorities.

UNISON Scotland acknowledges the administrative difficulties likely to be faced by local authorities attempting to register second/long-term empty homes if no incentive to register is afforded to the owners of these properties. UNISON Scotland therefore accepts that one possible solution would be to offer a small discount of 10% to act as an incentive to register second /long-term empty homes.

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For Further Information Please Contact:

Matt Smith, Scottish Secretary
UNISONScotland
UNISON House
14, West Campbell Street,
Glasgow G2 6RX

Tel 0141-332 0006 Fax 0141 342 2835

e-mail matt.smith@unison.co.uk

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