Exclusive:Edinburgh set to roll out 300% second homes tax
Backlash from property owners over ‘disproportionate’ charge
A controversial plan to charge second home owners in Edinburgh four times the normal rate of council tax is to be implemented early next year.
The 300 per cent premium for second and long-term empty homes in the city was due to be rolled out earlier this year, but the measure was suspended following legal advice.
Now, however, councillors are expected to rubber stamp plans to introduce the increase, which will come into effect from January 2027.
Scenario modelling prepared by the City of Edinburgh Council suggests the higher level of premium will bolster council tax income across the city by around £4 million a year and improve affordable housing provision.
However, second home owners, some of whom will face a council tax charge of nearly £16,000, have hit out at the plans, describing the premium as “disproportionate, unreasonable and unfair,” and warning that they were being “punished.”
Owners of second homes in the capital have been charged double council tax on their properties since 2024, but under the changes, the premium is set to increase sharply.
Richard Lloyd-Bithell, the local authority’s service director for finance and procurement, said the additional premiums would “contribute positively” to increasing the supply of affordable housing within the city and may also reduce “upward pressure” on house prices and rents.
It comes as the number of open homeless cases in Edinburgh is now almost double the level it was in 2020, with a significant increase in the time taken for a case to be closed. At the same time, a 40 per cent increase in construction costs has led to a slowdown in the rate of new house building, alongside some reductions in grant funding for new affordable homes.
The policy of charging a 300 per cent supplement on top of existing council tax charges was part of a Liberal Democrat amendment to the local authority’s latest budget.
The Labour administration had originally proposed a 200 per cent supplement to try and encourage owners to bring properties back into use, and address Edinburgh’s ongoing housing emergency. The local authority estimated that such a premium would increase overall council tax income by £2.7m.
According to council data from April this year, there are 1,462 second homes in the city, with an additional 1,707 long-term empty properties.
In a report to the full council committee, which is due to meet next Thursday, Mr Lloyd-Bithell said the introduction of the 300 per cent premium in 2027 would provide “additional time” for those households impacted by the change to look at “mitigating actions.”
But one second homeowner, Morag Campbell, who now lives in Berkshire, said she was appalled at the changes.
“I was born and brought up in Edinburgh, attended school and university there, and now feel I’m being hounded out,” she told The Scotsman.
Another second homeowner, who did not wish to be named, hit out: “The council repeatedly says that the purpose of the premium is to encourage properties to be brought back into use. But my property is already in use.
“I live between Norway and Edinburgh and regularly use my home in Scotland. It is furnished, maintained and actively used. I also use local tradespeople for maintenance and improvements and contribute to the local economy. So what exactly is the excessive premium intended to achieve in my case?”
Mr Lloyd-Bithell said the January rollout would also provide extra time for the council itself to work with relevant households to consider what further support may be provided in “mitigating or managing the increased liability.”
He added that as it was introducing the increase, the council would adopt in full exemption provisions detailed in Scottish government guidance around the increase of council tax liability for such properties.
As part of the change, those parties who could obtain exemptions include MSPs who live furthest away from their constituents, and who are “unable reasonably to commute each day” to and from Holyrood, according to the report.
Council officers have raised the issue for the attention of councillors after the Scottish Parliamentary Corporate Body wrote to the local authority’s chief executive, Paul Lawrence, requesting that “special consideration” be given to MSPs carrying out their parliamentary duties.
It is estimated that the exemption for parliamentarians would result in an annual loss in council tax income of around £100,000.
After suspending the implementation of the premium earlier this year, the council carried out an online survey, which attracted 1,059 responses. The majority of respondents (81 per cent) were owners of a second home, with six per cent owning a long-term empty property.
A summary of their responses prepared by the council found that the planned premium increase earlier this year caused “unnecessary stress and anxiety,” leaving some homeowners “scrambling to gather money” or “rushing to put their properties on the market without sufficient time for consideration.”
It was felt that homeowners should have received at least a year’s notice of the increase, given the significance of the amount, the report explained.
Some respondents said that they were being “punished” by the council for having a second home, and viewed the 300 per cent premium as "disproportionate, unreasonable and unfair.”
When asked what cutbacks they would need to make to afford the increased premium, 70 per cent of all respondents said that they would have to cut back on discretionary spending and 68 per cent said they would turn to their savings.
Other respondents with long-term empty properties referenced the time taken to complete renovations to properties, highlighting the waiting times to access certain trades, specialist work and planning permissions. They also questioned the fairness in expecting new owners of long-term empty properties having to pay the 300 per cent premium.
One said: “It feels ridiculous that the property being deemed as long term unoccupied does not reset with a new owner. I am doing upgrades that make it impossible to live in, but I am financially better off living in the squalor of it to pay normal council tax for the two months of renovations.”
Some other respondents said they had been actively trying to sell their second home or long-term empty property but had found it difficult due to a slowed-down market and the rise of interest rates making it harder for buyers to secure lending.
One owner said their flat was impacted by cladding issues which meant it was “unsellable” at the moment, except at a “very reduced price.”
“Our cladding will be changed and most of the cost covered by the building insurance but progress is very slow indeed and I expect it will be several years before it has been done,” they told the council. “If we were to pay four times the normal council tax we would have to sell the flat, presumably taking a huge loss. This seems unfair. We have done nothing wrong.”
The council’s finance and resources convener, councillor Mandy Watt, said: “We suspended the agreed increase in council tax for second and long-term empty homes to allow for engagement with affected homeowners and to complete an integrated impact assessment.
“This work has been completed, and at their meeting on 27 August, councillors will consider if the proposed increase should be implemented from January 2027. It’s important that homeowners are aware that these proposals include the application of exemptions in accordance with the published Scottish government guidance.”
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