Non-domestic rates/Council Tax second and empty homes consultation: business and regulatory impact assessment

Business and regulatory impact assessment (BRIA) relating to the consultation on council tax for second and empty homes, and thresholds for non-domestic rates.


Annex B

Table 10: Summary of the current legislative framework for Second and Long-term Empty Homes, and Self-catering accommodation
Second Homes Empty Homes Self-catering accommodation
Local Property Tax Council Tax Council Tax Non-Domestic Rates
Definition A "second home" is a dwelling which is no one's sole or main residence and is lived in for at least 25 days during the 12 month period of council tax. An "unoccupied dwelling" is a dwelling which is no one's sole or main residence, but which is not a second home.

To be classed as self-catering holiday accommodation, a premises must:

  • Not be the sole or main residence of any person
  • Actually let for 70 days in the same financial year
  • Available to let, or actually let, for 140 days (note, this also includes the counting of the minimum 70 days of actual letting)
Default

50% discount must be applied on:

  • Job-related dwellings
  • Purpose built holiday homes

50% discount must be applied on:

  • Homes that have been empty for less than 6 months since the person liable for council tax purchased it and are undergoing major repair/structural alteration

Up to 100% Small Business Bonus Scheme. From 1 April 2023:

  • 100% relief will be available for properties with a rateable value of up to £12,000
  • properties with a rateable value between £12,001 and £20,000 relief will taper to 0%. The cumulative threshold for multiple properties cannot exceed £35,000.
Local discretionary powers

Councils can make modifications to the 50% discount default to:

  • Set a discount between 10-50%
  • Charge the full rate of council tax

Councils can make modifications to the 50% discount default to:

  • Set a discount between 10-50%
  • Charge the full rate of council tax or charge a premium of up to 100% on homes empty for 12 months+
Councils have discretion, in exceptional circumstances, to determine that self-catering holiday accommodation that fail to meet the 70 days actual letting, can continue to be classed as self-catering accommodation.
Exemptions   Homes that have been empty for less than 24 months and are actively marketed for sale or let are exempt from the premium. Note a premises may be unoccupied but exempt from Council Tax for another reason – e.g. the owner is deceased.  

Contact

Email: secondandemptyhomes@gov.scot

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