THERE appears to be universal agreement that Scotland is facing an acute shortage of affordable housing.

But the latest move from the Scottish Government to alleviate the crisis, announced earlier this week, is already stoking controversy in some quarters.

First Minister Humza Yousaf has unveiled a consultation on proposals to change how second and empty homes are taxed in a move designed to increase the supply of homes in Scotland.

The measures could give councils the power to double the full rate of council tax on second homes from April 2024 by bringing them into line with long-term empty homes, while views are also being sought on further powers which would allow local authorities to charge more than double rate on both empty and second homes in future years.

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At the same time, the consultation is asking whether there should be changes to the definition of when a property offering self-catering accommodation becomes liable for non-domestic or business rates.

It is to the Scottish Government’s credit that ministers are taking action to try to solve one of the biggest challenges facing contemporary Scotland. While anecdotally it seems like new homes are being built all the time, it is not at a rate sufficient to keep up with demand.

The government highlights in its consultation the growth of online short-term accommodation platforms in recent years that has seen more and more homes switch from being primarily used as a permanent residence to short-term holiday lets or second homes. It notes that this can “cause problems for neighbours and make it harder for local people, particularly young people and those with fewer resources, to find homes to live in”.

Veteran Scottish hotelier Paddy Crerar has previously noted that this is a particular problem for people in rural and remote areas. In an interview with The Herald business editor Ian McConnell last year, Mr Crerar, who recently sold the Crerar Hotels business he founded in 2006, highlighted the lack of affordable houses to rent or buy in the areas around rural Scotland where the company operates.

He lamented how long it takes to secure planning permission for new developments for “even non-controversial projects” and also argued there should be a “bit more government intervention” when it came to the “Airbnb model” that has seen people become “second, third, fourth, fifth, sixth home owners”.

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Moves have been made by the Scottish Government to regulate the burgeoning short-term let sector. It will later this year introduce a short-let licensing regime under which local authorities will have the power to require the owners of such properties to obtain a licence to operate. The scheme has been heavily criticised by the tourism industry and by the providers of short-term lets in rural areas, who argue that it will add unnecessary extra and costly bureaucracy at a time when the sector is still recovering from the pandemic. Operators say they already meet mandatory legal standards on areas such as health and safety.

Now, with this latest consultation from the Scottish Government, further change could be on the way.

The new proposals are effectively aimed at ensuring more accommodation is liable to council tax if it does not exceed a specific threshold on how many days it is let per year as short-term accommodation. If a property does not pass a 70-day letting threshold each year, it would become liable for council tax, as opposed to non-domestic rates, the consultation says. Some property owners currently liable for non-domestic rates are entitled to relief from the tax or can apply for exemption, depending on the valuation of their property.

According to the Scottish Government, the latest figures show that there were 42,865 long-term empty homes in Scotland in January 2023.

“We want everyone in Scotland to have an affordable home that meets their needs and this work to improve the availability of sustainable long-term housing opportunities is a core part of that,” said Mr Yousaf.

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“By recognising the important role councils have in considering local needs, these proposals aim to strike a balance between good housing supply and helping communities to thrive and benefit from tourism.”

On paper, the aim is noble. But the response from the tourism sector would indicate that there would be consequences to this approach.

Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, expressed frustration that self-catering businesses in her view are being conflated with second homes. “It seems extraordinary that people seem unable to grasp the difference between a second home and a self-catering business,” Ms Campbell posted on LinkedIn. “They are totally different things and should not be treated the same. Self-catering businesses provide social and economic benefits for communities and local economies. Second homes lie empty for much of the year, providing no benefits whatsoever.”

The frustration expressed by Ms Campbell is understandable. While it is encouraging that Scottish ministers are striving to tackle the housing shortage, it is entirely to be expected that the tourism industry is concerned over the prospect of having to deal with more tax and bureaucracy at such a critical time.

The tourism sector was hit badly by travel restrictions imposed during the pandemic and was only just beginning to reap the benefits of the industry reopening when it began to be affected by a host of challenges that have trailed in Covid’s wake, from acute labour shortages and supply-chain disruption to rampant inflation, which has been exacerbated by Russia’s war on Ukraine.

With official figures published yesterday showing that annual UK consumer prices index inflation eased slightly in March but remained extremely high at 10.1%, there remains major pressure on consumers, who are now likely to be more circumspect about how and where they spend from a tourism perspective.

Ms Campbell is right to highlight the economic contribution that self-catering accommodation generates by attracting visitors from around the UK and overseas, who will spend money in local shops, bars, restaurants, and tourism attractions.

The Scottish Government must be aware of what may be at risk from its latest proposals, no matter how laudable its aim of tackling the housing shortage.