Second home owners 'not to blame' for housing shortages
Ross Greer, the party's finance spokesman, and a west of Scotland MSP, has tabled amendments to the Housing Bill which is going through Holyrood to create the new zones.
Currently, someone buying a holiday home anywhere in Scotland must pay a levy known as the Additional Dwelling Supplement (ADS), at the moment set at 8% of the property's value. It is an additional charge which is added to any Land and Buildings Transaction Tax (LBTT) due on the house purchase.
The Scottish Greens want ministers to be able to raise the ADS rate to 16% in the areas where there is a housing shortage arguing it could stop property prices from rising so much that local buyers are priced out of the market. At present, this tax can only be increased or decreased nationwide, with targeted changes not possible.
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But David Melhuish, director of the Scottish Property Federation, disputed the Greens argument.
He said second home owners were not "mainly to blame" adding an insufficient number of homes were being built.
"The success of the increased council tax and LBTT for second homeowners has been mixed to date. The evidence suggests there have been reductions in the number of second homes by around 10% in the past decade or so, as taxes on second homes have increased and we would expect a further significant increase in LBTT on second homes would add to this trend," he told The Herald.
"This might not significantly improve the availability of homes for communities however, as affordability will still be a challenge due to the sheer volume of demand for homes.
"While we understand the temptation to highlight second homeowners as an issue, we do not think they are mainly to blame. The bigger problem across Scotland remains that the delivery of new homes of any tenure, including affordable or mid-market rent, has simply not been sufficient to meet demand."
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Mr Melhuish spoke out as the Scottish Government launched a consultation on Wednesday on exemptions from the upcoming rent controls system in Scotland. Under the consultation new build rental homes would be exempt from rent controls.
"The evidence we published this week shows a 0% increase in new planning applications for build to rent homes in Scotland in the past year," he said.
"In our view this is due to the chilling effect of the rent control debate on new investment proposals. We must therefore boost supply and proposals to exempt new build rental homes from rent controls are therefore welcome."
Mr Greer responded: 'Sky high rents and house prices are pricing far too many people out of the communities they've grown up in.
"One of the key drivers of this housing crisis in rural areas in particular is the staggering level of second home ownership in some of these communities.
'It is vital that we build more affordable homes. One obvious way to do that is by using increased tax receipts from the generally wealthy owners of second and holiday to fund more social housing.
'The recent fall in holiday home sales is a sign that tax changes already secured by the Scottish Greens are doing exactly what we intended.
"By setting a higher rate in the areas where this crisis is worst, we can raise vital funds and increase the number of homes available for people who will actually live in them.'
The ADS is charged if some buys an additional residential property in Scotland including a second home, a rental property or a holiday home.
Since the 2021 election the Scottish Government has doubled the ADS 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.
The supplement 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.
The Greens' proposals on the ADS are among a total of 447 amendments to the Housing Bill which will begin to be debated next Tuesday 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%.
The Scottish Government has also set a target date for local authorities to make market assessments and recommendations on whether or not to introduce rent control areas. The new date is May 31 2027.
A Scottish Government spokesman said: 'A number of amendments have been lodged by opposition MSPs at stage 2 of the Housing (Scotland) Bill and will be considered by the Local Government, Housing and Planning Committee.'
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