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Will Humza home hike tax us to obscurity?

  • Date: Monday 24th April 2023
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As both a business owner and homeowner, I watched with interest the reaction to First Minister Humza Yousaf’s proposals for council tax hikes at the Scottish Trades Union Congress last week.

The announcement has caused divide as it was revealed that those with second or empty homes could face a hefty increase.

The plans would see local councils have more authority and owners with multiple properties would be hit with double council tax bills even on holiday homes.

The proposals, following consultation with Cosla, would see the increase come into effect from April 2024 and this has inevitably sparked some outrage.

Councils charging extra on long-term properties which are empty isn’t new – they already have the power to do this – but these new plans mean that even holiday homes which are in regular use by owners will be affected and that’s what’s causing some controversy.

Out of interest I decided to do some digging to find out how many people would be affected, and in Scotland alone, according to council tax statistics, there are around 24,287 second homes in Scotland which the double council tax rate could apply to.

It would inevitably cause a headache for those who let out properties to holidaymakers and rely on this as an income / second income. Will it discourage them from continuing to do so – and if so would this impact on our tourism industry?

Currently a self-catering property is liable for non-domestic rates if it’s let for a total of 70 nights and is available for let for 140 nights in a financial year. These plans also question whether this needs to change – and if it does change, this could cause issues for those who let holiday homes out to the public for short breaks. I wonder how much of a reduction we’d see in the number of available properties.

Of course, the First Minister is hoping his proposed measures will make a difference in the current housing crisis.

He has said the plans aim to create a balance between good housing supply and helping communities “thrive and benefit from tourism”. Ultimately the measures are intended to increase long-term housing availability.

Let’s hope any changes do end up striking the right balance.

There has been a wave of criticism around the proposals creating a greater split between Scotland and the rest of the UK.

Some believe that widening the tax divide with England, Wales and Northern Ireland will be damaging.

In fact one councillor representing Inverclyde East, David Wilson, certainly didn’t mince his words when he commented on this aspect of the proposals.

He reckons “tax disincentives” are not what we need and said it seemed to be the policy of Humza to “tax us to obscurity”. Ouch.

The worry is that current property owners would pull out of Scotland, and Scotland would lose its appeal for future investors.

One Scottish business leader, David Alexander, who is the chief executive of lettings agency DJ Alexander Scotland Ltd, spoke out on this very point. He said the policy would make second home owners think twice and potential buyers look elsewhere, and noted that second homes are already subject to a hither rate of property tax in Scotland.

This is clearly an extremely divisive policy proposal and as usual the Twittersphere is still arguing it out.

On one hand we have some people describing a tax hike as ‘punishing success’ and discouraging innovators and wealth creators.

But on the other hand, some people are pointing out that they’re currently struggling to make ends meet so they have very little sympathy for people who are worried about what their second home is costing.  And some reckon it’s just a headline-grabbing gesture that, in reality, will do little to impact on housing supply.

Ultimately both sides must be listened to and it’s important to remember that this is a consultation, so do remember that if you want to put in your tuppenceworth before legislation goes before the Scottish Parliament, now’s the time to do it.

 

SIDE

We’ve been pretty lucky with the weather recently and it seems that more people are opting for staycations these days instead of hopping on a plane and travelling elsewhere.

Of course, this is great news for our tourism economy, and there’s one type of holiday that seems to be booming – glamping.

Testament to that was the recent news of a significant £1.5 million investment in Scotland’s glamping industry by the end of the year.

Belfast-based company Further Space is planning to open a new site on the Isle of Mull and also has plans for premises in Skye, Oban, Darvel and Fordie in the near future.

It’s great to see this sort of investment, particularly in rural Scotland, bringing a welcome economic boost.

It’s bound to be welcome news for businesses in those areas, from shops to restaurants, bars and more. After an especially turbulent few years, a boost in tourism will surely be welcomed. 

The caveat is ensuring we have the infrastructure – and more importantly, the staff – in place to ensure we can showcase the best Scotland has to offer to the best of our ability.

With Brexit leading to a shortage of seasonal workers, not to mention the state of some of our roads, there’s still some groundwork needed.

Overall, this investment is an exciting one which keeps Scotland on the map for investors and holidaymakers alike.

 

LAUGH

Hold on to your broomsticks – we’ve seen Harry Potter books, movies, video games, merchandise and more, and it looks like this is one franchise that magically keeps growing and growing.

When I heard a brand-new TV series is on its way I figured it could only be good news for Scotland’s economy.

The decade-long television show is set to be aired on US streaming service Max and promises to be a “faithful adaptation” of the famous JK Rowling books – meaning many of the locations from the original films could reappear on our screens.

Everywhere from Victoria Street in Edinburgh to the Glenfinnan Viaduct and the breathtaking Glencoe have enjoyed a tourism boom (in fact Visit Scotland even has an itinerary to make it easy to follow in the wizard’s footsteps).

Who knows, maybe we’ll even see some new Scottish locations popping up in the series that will reap the benefits in future.

 

WEEP

Glasgow boasts some stunning architecture, from traditional buildings like the city chambers and Kelvingrove Art Gallery to the more futuristic-looking Armadillo or Transport Museum.

So I was surprised and dismayed to hear one of the city’s buildings received an award nobody would be proud of – the Met Tower has been named as the second ugliest building in the UK.

The former college building, which was one of the first commercial high-rises in the city, was given a makeover a few years ago with the now iconic ‘People Make Glasgow’ banner. However according to photography experts at ParrotPrint.com, the structure still deserves the silver medal in the ugly building stakes.

One of the city’s top architects has since hit back, dismissing the tower’s new accolade as “ridiculous”, and I have to say I agree. While there are undoubtedly more impressive buildings, this one with its famous slogan has still become a cultural icon. 

 

 

 

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