146. The consultation paper noted that self-catering properties which make up just under 6% of non-domestic properties in Scotland (as at June 2018), can in some circumstances be liable for non-domestic rates. While 45% of non-domestic properties receive Small Business Bonus Scheme (SBBS), over 86% of self-catering properties benefit from this, providing an average saving for these properties of £1,398 in 2018-19. To be eligible for SBBS relief, the cumulated rateable value of all non-domestic properties held by the ratepayer must be no more than £35,000. Self-catering holiday accommodation is exempt from council tax and liable for non-domestic rates if it is not the sole or main residence of any person. Question 12 asked,
Q12: 'Do you have any comments on eligibility for non-domestic rates?'
147. A total of 639 respondents commented at this question and the following table provides a breakdown of those who responded.
Table 16: Q12
|Host with 1 property||136|
|Host with 2+ properties||83|
|Hotel / B&B owner||14|
|Other (non short-term let) landlord||13|
148. Reponses to this question demonstrated a perception on the part of a large number of respondents that short-term lets or self-catering properties should be contributing in some way to public services used by guests. The most common theme, cited by a large minority of respondents across all sub-groups, was that all rental accommodation should pay either commercial (non-domestic) rates or council tax.
149. A small minority of respondents felt that council tax should be paid in full so that there is parity across the board (the highest level of support came from other landlords). Similar numbers also commented that properties should be contributing to council services at least on a pro rata basis; or that the rates paid by owners should be higher than council tax levels. Once again, the highest levels of support for these came from affected residents, community organisations and other landlords.
150. A few respondents (including a high number of other (non short-term let) landlords) also felt that properties should not be classed as rateable and get full SBBS relief or that short-term lets should not qualify for the SBBS and / or that tax breaks should not be available. As noted by an organisation:
"The eligibility for non-domestic rates does not necessarily create issues, but rather the eligibility of small-scale hosts, with 1 or 2 properties, for the Small Business Bonus Scheme, which can result in a property being operated commercially, with no non-domestic rates or council tax liability. This creates an unfair advantage for small-scale, short-term let hosts when compared either to larger more commercial operators, who will be liable for non-domestic rates or private rental sector landlords and their tenants who remain liable for council tax. There are also implications for revenue collection."
151. While large numbers of respondents supported payment of some form of domestic or non-domestic rates, a few noted their support for the current system and felt the 140 day rule works well. This point was raised by higher numbers of hosts and other businesses.
152. One organisation cautioned that any changes to taxation would need to be carefully designed so as to encourage behaviours that would benefit the working of the whole housing system, while also supporting the tourism sector and short-term accommodation needs.
153. Very small numbers of respondents echoed themes cited at earlier questions and noted:
- The need for regulation and enforcement.
- Introduction of a licensing system and / or a register of all short-term lets.
- Owners who share or swap their homes should not be liable for increased costs.
- There is a need to encourage tourism, with no additional charges to be levied on short-term lets.
- The introduction of a tax on rental income.
- Universities who let out student accommodation should have to pay some form of non-domestic rates or council tax.
- Suggestions for a tourist tax / levy to be introduced, with attendees at an event suggesting this could fund local services and help to empower local communities.
- Regardless of what options are introduced, there should be no loss of revenue to local councils.