SNP reject proposal for new tax on second homes in hotspots

The Herald Scotland

a day ago

The tax, known as the Additional Dwelling Supplement, is paid by the buyer in addition to the Land and Buildings Transaction Tax, the standard levy on home purchases.
Currently it is 8% of the cost of the property but the Greens wanted it raised to 16% in areas where there is a housing shortage arguing that it made sense for the government to be able to change the tax in a targeted way in particular regions rather than having to make any change nationwide.
Their demand was made more than a year after the Scottish Government declared a housing emergency.
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The Greens pointed to some communities such as Lochranza on Arran where more than a third of houses are holiday homes and that the situation pushes up housing costs and often forces young people to move out of their own communities in search of an affordable place to live.
Ross Greer, the Scottish Greens' finance spokesman, who tabled the amendment to legislation going through Holyrood, told The Herald last month that a high number of holiday homes in some areas reduced housing supply for local people as he urged ministers and opposition parties to back his proposal when it was voted on at stage two of the parliamentary process.
But the Scottish Government and the other parties rejected his calls.
A spokesman for social justice secretary Shirley-Anne Somerville said decisions over the ADS levels were made at the Scottish Budget.
'A number of amendments to the Additional Dwelling Supplement (ADS) were put forward at Stage 2 of the Housing (Scotland) Bill. The amendments were not passed. Decisions on the rates and bands of Land and Buildings Transaction Tax, including the ADS, are taken centrally as part of the Scottish Budget process," he said.
Mr Greer hit back accusing his political opponents of protecting the wealthy.
'Parliament voted to declare a housing emergency in Scotland last year, but now every other party has just voted against Scottish Green proposals to stop the richest people buying up homes they don't need in the communities with the worst housing shortages," he said.
'My proposals to increase the Additional Dwelling Supplement in rent control zones and National Parks would only have affected those wealthy enough to even consider buying a second or holiday home. The end result would have been to make it easier for first time buyers in particular to get a home in the community they've grown up in.
'It cannot be right that in a number of communities across Scotland up to half of the properties are either second homes or holiday lets, despite a housing crisis which has led to 10,000 children currently living in temporary accommodation. The wealthy have once again been protected at the expense of families desperately waiting for homes.'
Since the 2021 election, the Scottish Government has doubled the Additional Dwelling Supplement from 4% to 8% and given councils the power to double council tax on holiday homes after coming under pressure from the Scottish Greens.
The Greens say the reforms have reduced the sale of holiday home purchases, with 2455 fewer second homes bought last year than in 2023, the largest decrease in a decade.
ADS will also raise more than a quarter of a billion pounds for public services in the current financial year, according to the party.
Thirteen of Scotland's 32 councils have declared a housing emergency, beginning with Argyll and Bute Council in June 2023, with the most recent being East Lothian Council in November last year.
A national housing emergency was announced by the Scottish Government for the whole country in May 2024.
Experts believe the main driver of the emergency include pressures on homelessness services, high levels of people in temporary accommodation and a lack of affordable homes compared to high waiting lists.
Mr Ross's proposals on ADS were among more than 400 amendments to the Housing Bill which were debated by MSPs on Holyrood's local government, housing and planning committee.
The legislation will be voted on later at its final parliamentary stage - stage three - in the Holyrood chamber and if passed would allow councils to create rent control areas where rent is capped to certain levels.
Ministers have tabled an amendment proposing that rent rises are capped to the rate of inflation plus 1% to a maximum of 6%. They have also set out exemptions to this rule.
The Scottish Government has also set a target date for local authorities to make market assessments and recommendations on whether or not to introduce a rent control area. The new date is May 31 2027.
Many in the property sector are opposed to rent controls arguing the root of the problem of high housing costs is an insufficient number of homes to buy or rent.
They argue rent controls may make the problem worse by prompting landlords to sell up.