Short-term lets: regulation information

Background

In April 2017, the Scottish Government set up the Expert Panel on the Collaborative Economy to investigate how Scotland could maximise the benefits of the collaborative economy and that wider economic, social and community impacts are considered. This panel found that peer-to-peer accommodation had a positive impact on the Scottish economy because it expanded the range, choice and flexibility of tourist accommodation. However, they highlighted several issues and challenges in peer-to-peer accommodation and short-term lets.

In July 2018, the Scottish Government published its response to the Expert Panel’s report. It established a Short-Term Lets Delivery Group to assess the evidence base and the impact of short-term lets, identify the existing powers local authorities have, and explore whether further measures are necessary.

The Programme for Government 2018­̵­­–2019 made a commitment to ensuring that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests. In April 2019, the Scottish Government launched a consultation on a regulatory framework for short-term lets in Scotland and an annex, The Short-Term Rental Sector, Housing and Tourism in Scotland.

In October 2019, the Scottish Government published a report on the 2019 consultation and independent research on the impact of short-term lets on communities.

Following careful consideration of the 2019 consultation responses and the evidence provided by independent research, the Scottish Government announced it would

• establish a license for short-term lets, using the powers in the Civic government (Scotland) Act 1982, with a mandatory safety component that will apply to all short-term lets in Scotland
• prioritise work to give local authorities the power to introduce short-term let control areas under powers in the Planning (Scotland) Act 2019
• undertake a review of the tax treatment of short-term lets to ensure they make an appropriate contribution to the local community

You can find more information in the news release and the official record of the Minister for Local Government, Housing and Planning’s statement to the Scottish Parliament.

In September 2020, we launched our 2020 consultation that defined short-term lets and detailed proposals on the licensing scheme and control areas. We received more than 1,000 responses to this consultation. The views expressed by the participants are set out in the 2020 consultation report, published on 10 December 2022.

On 14 December 2020, the Licensing Order, Control Area Regulations and the Business and Regulatory Impact Assessment (BRIA) were laid at the Scottish Parliament. The Control Area Regulations were approved by the Scottish Parliament on 24 February 2021 and came into force on 1 April 2021.  Planning Circular 1/2021: Establishing a Short-Term Let Control Area was published on 25 June 2021.

The Scottish Government established the Short-Term Lets Stakeholder Working Group in February 2021 to assist with the production of guidance and identify any necessary changes to legislation.

The Scottish Government launched a consultation on a draft Business and Regulatory Impact Assessment between 25 June 2021 and 13 August 2021. Draft guidance for hosts and operators, licensing and planning authorities, letting agencies and platforms was published to accompany the consultation. The Scottish Government received over 1,000 consultation responses.

A consultation report and updated Business and Regulatory Impact Assessment were published on 23 November 2021. The Licensing Order and Control Area Amendment Regulations were laid in November 2021, approved by the Scottish Parliament on 19 January 2022 and came into force on 1 March 2022. 

The law around short-term lets changed on 1 October 2022. New hosts must apply for a short-term let licence before accepting bookings or receiving guests. On 7 December 2022, the Scottish Government announced legislation would be laid at the Scottish Parliament in January 2023 to give existing hosts additional time to make an application for a licence. This will be a one-off, six-month extension for existing hosts to recognise the wider cost of living crisis that is placing pressure on existing short-term let hosts and businesses. On 1 March 2023 the Scottish Parliament approved this six-month extension. Existing hosts must apply for a licence before 1 October 2023 (previously 1 April 2023) and can continue operating while their application is being determined.

All 32 licensing authorities have operational licensing schemes. The mygov.scot website has information about how to apply, including a drop down box to select the relevant local authority that connects you to the authority’s website page for short-term let licensing.

The Scottish Government has set up a short-term let campaign site to raise awareness of the new licensing requirements and has run three bursts of digital marketing to promote this in October 2022, March 2023 and August 2023.