Non-domestic rates/Council Tax second and empty homes consultation: partial impact assessments

Partial impact assessments relating to the consultation on council tax for second and long term empty homes, and thresholds for non-domestic rates.

1. Impact assessments

1.1 The following chapters set out:

  • a screening exercise for a Children's Rights and Wellbeing Impact Assessment (CRWIA), which is used to consider whether a full assessment is required at this point. A CRWIA needs to identify, research, analyse and record the impact of a proposed law or policy on children's human rights and wellbeing
  • the results summary of Equalities Impact Assessment (EQIA), examining the impact on different people and groups, prevent discrimination and identify opportunities to promote equality
  • a Data Protection Impact Assessment (DPIA) to consider arrangements for handling personal data and privacy for consultations
  • a summary assessment against the Fairer Scotland Duty. The duty focuses on socioeconomic inequality issues such as low income, low wealth and area deprivation
  • a partial Island Communities Impact Assessment (ICIA), which is required by theIslands (Scotland) Act 2018 where a policy or strategy is "likely to have an effect on an island community which is significantly different from its effect on other communities"
  • a summary of the pre-screening document for the Strategic Environmental Assessment (SEA). The SEA helps to protect the environment by allowing planners and decision makers to consider the likely significant environmental effects of plans, programmes and strategies

1.2 A partial Business and Regulatory Impact Assessment (BRIA), examining the likely costs and benefits of the consultation proposals, is available separately.


1.3 In March 2021 we published Scotland's first national population strategy. Its vision for a future Scotland focused on taking a place-based whole-system approach to drive local needs around the economy, infrastructure, public services and housing.

1.4 At the same time the Scottish Government published its Housing to 2040 Strategy. Its bold vision and principles included prioritising homes for living in, and not accumulating wealth.

1.5 In addition to the national population strategy and Housing to 2040, our Shared Policy Programme with the Scottish Green Party, commits us to providing councils with tools and powers to support them to make best use of existing housing stock. This includes enabling councils to manage the number of long-term empty homes, short-term lets and second homes.

1.6 The Scottish Government has already delivered measures which ensure:

  • councils can change or remove the discount for council tax charged on second homes
  • councils can change the discount for council tax on empty properties, and they can also remove the discount or charge up to a 100% premium (double the full rate) on council tax for homes empty longer than 12 months
  • councils can use planning as a tool to manage numbers of short-term lets by designating all or part of their area as a Short-term Let Control Area
  • the total purchase price of an additional property (if over £40,000) is liable for an Additional Dwelling Supplement on Land and Buildings Transaction Tax at a rate of 6%
  • a requirement for self-catering holiday accommodation to be actually let for a period of at least 70 days and available to let for 140 days or more in each financial year, to be eligible for non-domestic rates rather than council tax

Policy objectives

1.7 The high-level policy purpose of Housing to 2040 is for everyone in Scotland to live in safe, secure and warm homes. We need to do more to prioritise housing for permanent accommodation, whether this is in the rented sector or home ownership. Taxation is one measure that can support local areas to reach the right balance for their local circumstances, as a means to influence ownership patterns and the detrimental impact they can have on the availability of homes to meet local needs. The consultation seeks views on proposals to provide councils with additional powers over local taxation that can be used according to local needs, alongside other mechanisms, to help make best use of existing housing.

1.8 The proposal is whether to provide additional powers to councils allowing them discretion to:

  • charge up to 100% premium (double the full rate) on council tax for second homes;
  • charge more than 100% premium on council tax for second homes and long-term empty homes

1.9 As some second homes are used as short-term lets, we are also asking for views on whether the current non-domestic rates thresholds for self-catering accommodation should change, and/or if councils should have discretion to set them.

Contribution to national outcomes

1.10 The policy objectives set out in these impact assessments and the consultation paper published on 18 April 2023, support the following outcomes set out in Scotland's National Performance Framework:

  • we live in communities that are inclusive, empowered, resilient and safe
  • we tackle poverty by sharing opportunities, wealth and power more equally
  • we are healthy and active
  • we have a globally competitive, entrepreneurial, inclusive and sustainable economy
  • we have thriving and innovative businesses, with quality jobs and fair work for everyone
  • we value, enjoy, protect and enhance our environment
  • we are creative and our vibrant and diverse cultures are enjoyed widely


1.11 Second homes and empty homes (unoccupied dwellings) are currently defined in the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013 as follows:

  • a "second home" is a dwelling which is no one's sole or main residence but which is furnished and lived in for at least 25 days during the chargeable 12 month period
  • an "unoccupied dwelling" is a dwelling, which is no one's sole or main residence but which is not used as a second home.

1.12 In this consultation paper, short-term lets is a wide term used to refer to the whole or part of accommodation provided to one or more guests on a commercial basis that does not become the main residence of the guest/s.[1] There are different types of short-term lets such as self-catering accommodation, B&Bs, guest houses, home letting and home sharing. What local taxation short-term lets are liable for will vary depending on the type of short-term let and applicable taxation rules.

1.13 For example, if a second home is used as self-catering accommodation it will be liable for non-domestic rates if the premises is:

a) not the sole or main residence of any person; and

b) being made available for letting, on a commercial basis and with a view to the making of profit, for 140 days or more in the financial year, and have in practice been let in the financial year for a total of 70 days[2]

1.14 If the self-catering accommodation does not meet the above criteria and thresholds it is liable for council tax instead.

1.15 B&Bs and guest houses may be liable for non-domestic rates if their operation has capacity to cater for more than 6 people at any one time, regardless of how many days the premises or rooms are available or actually let.



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