Council tax on second homes: FOI release

Information requested

1. Your request

You asked:

"I’d like to know if an Island Communities Impact Assessment was undertaken in relation to removing the cap on the council tax premium for second homes. If so, please provide me with a copy.

If not, was an explanation ever given as to why not, as required by the Islands (Scotland) Act 2018? If yes, please provide a copy."

Response

Response to your request

1 Information relevant to your request

The Scottish Government published partial impact assessments as part of the 2023 consultation on Council Tax for second and long term empty homes and non domestic rates thresholds for self catering accommodation, which included an Island Communities Impact Assessment at consultation stage. This is publicly available on the Scottish Government’s website: https://www.gov.scot/publications/nondomestic- rates-council-tax-second-homes-long-term-empty-homes-consultation-partial-impactassessments/.

Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you, but the above link is provided for convenience.

2 ICIA for the 2026 Regulations

The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2026 remove the previous statutory cap on the level of Council Tax premium that local authorities may apply to second homes and long term empty homes. However, the Regulations maintain a national default premium of 100%. They do not mandate any increase in Council Tax. Rather, they provide local authorities with the flexibility to apply that premium, increase it above 100%, reduce it, apply no premium, or offer a discount depending on local circumstances. This reflects the policy intent set out in the Draft Policy Note which is available online here: https://www.legislation.gov.uk/sdsi/2026/9780111065303/policy-note/contents.

Under the Islands (Scotland) Act 2018 a relevant authority must undertake an Island Communities Impact Assessment (ICIA) where a policy, strategy or service is likely to have an effect on island communities which is significantly different from its effect on other communities. The 2026 Regulations are enabling in nature and do not effect a change in Council Tax liability in any of Scotland's 32 local authority areas. Any practical impact will arise only if, and dependent on how, individual local authorities choose to exercise their discretion.

3 Local authority responsibilities

Local authorities are themselves relevant authorities under the Islands (Scotland) Act 2018. Where a council decides to vary the Council Tax premium in its area, it is for that authority to consider whether its decision requires an Island Communities Impact Assessment. The Scottish Government cannot predict or determine the local democratic decisions of 32 individual councils, nor pre-empt the specific form those decisions may take.

4 Whether a national ICIA was undertaken

The Housing (Scotland) Act 2025, which created the power enabling this change, was accompanied by supporting documents including a Financial Memorandum setting out the potential financial implications.

As the 2026 Regulations do not in themselves mandate any increase in Council Tax in any local authority area any substantive impact will arise only if, and dependent on how, individual local authorities choose to exercise their discretion. While our aim is to provide information whenever possible, in this instance the Scottish Government does not have the information you have requested. Accordingly, in terms of section 17(1) of FOISA, I give notice that the Scottish Government does not hold a standalone ICIA specific to these Regulations.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at https://www.gov.scot/foi-responses.