Edinburgh Council Tax on second homes

[Emma3765]

Is anyone letting a second home? 
Trying to understand the impact of the 200% council tax and am interested in how others are dealing with this through short term rental.  
Thanks

[Mike-And-Jane0 · Accepted solution]

@Emma3765 we don't (yet) have a council tax surcharge for 2nd homes in Derbyshire but our holiday lets are on business rates so as long as we meet the criteria we don't pay council tax.

[Emma3765]

Thanks for your reply.  What are the criteria?  Is there a minimum number of days it must be let for? 
what happens if you can’t achieve that number? 
many thanks 

[Mike-And-Jane0]

@Emma3765 In England, to qualify for business rates, it has to be available to let for 139 nights and actually let for about 69 nights so is dead easy to achieve. Wales have different numbers that are harder to achieve. No idea about Scotland.

I suspect England will increase these numbers as the qualification as a Furnished Holiday Let is 105 nights let and available for 210. It makes no sense to me to have different figures.

[Emma3765]

Thank you.  Really helpful

[Katharine110]

Hi Mike and Jane, 

Sorry to jump on this so long after your post. But do you know what will happen if you haven't managed to let it out for the 69 days? 

We inherited our mums house which is now our second home (we live and rent elsewhere). We have been paying council tax for a second home and have received a letter about the 100% premium (Bournemouth and Poole council). We are now looking to change our account to pay Business Rates, which we now realise we should've done a while ago. But we have only managed to let the house 54 days from August 2023-August 2024.

Thank you, 
Katy 

[Rebecca]

Hey @Katharine110 It's lovely to see you joining in conversations on the Community Center!

I'm tagging @Mike-And-Jane0  here so they receive a notification of your message. This ensures that they get a notification that you've replied to them specifically 🤗

Quick tip: if you type "@" and then the username, this will tag the member that you're replying to. I hope this helps to keep the conversation flowing, and if you've got any questions, just ask. 

Have a wonderful day! 🌼

[Mike-And-Jane0]

@Katharine110 Sorry I have no idea except you can make an election (excuse) for why you have failed to achieve the 70? nights. Read all about FHLs on gov.uk hmrc site

[Martin3344]

@Emma3765 

The 200% council tax surcharge won't apply in Edinburgh if you are doing long term rentals as it is then your tenant's primary residence. The surcharge is designed to deter empty / under-used properties and get them back into residential use. You could verify your personal situation here if required with the council for this scenario.

Regarding business rates as discussed by Mike-And-Jane0 then if you are operating short term rentals in Edinburgh above the threshold you are required to register them with the Lothian Valuation Board. The threshold in Edinburgh is 70 days of actual letting as well as 140 days of intention to let. This then removes your rentals from the Council Tax roll and moves you onto business rates (which could then be either partially or wholly offset by the Small Business Bonus Scheme arrangements, which you would apply for separately). You would then also additionally need to set up and pay for your water arrangements privately as a business, as they would no longer be covered by the Council Tax.

Short term rentals would only realistically be an alternate option for you at present if you have submitted a Short Term Let licence application to the council prior to the deadline of October 1st 2023, and you were an existing operator prior to the establishment of the Edinburgh Short Term Let control zone on 5th September 2022. Edinburgh Council would almost certainly not give you a licence / planning permission if you are a new operator / licence applicant after that time unless you have exceptional circumstances. This whole area is subject to extensive legal and political arguments at the current time, but the outlook is rather bleak at present for the vast majority of current operators. For more information and updates you could check the website of the ASSC (Association of Scottish Self Caterers), which is leading the defence of our industry, and the W/App and Facebook groups for Save Self Catering in Scotland.

If you are currently doing long term lets I would suggest that you stick to that just now and don't waste your money on fruitless short term let licence / planning applications at the present time until the picture is clarified one way or the other over the coming months. Sadly this is not good news for future visitors and for the tourism industry in Scotland !

Sorry if this is not good news, but I hope that the information about the various scenarios is of help to you.

[Emma3765]

Martin- thank you so much for this helpful reply.  I have only done occasional short term lets through theatres usually and certainly not enough to meet the threshold.  
I was not aware of the deadline for the licence application, I have recently read about this.  It sounds like I’ve got no hope of getting one now.   I’m unfortunately the situation the council are trying to get rid of and it’s going to work!  We keep the property so we can regularly come and look after elderly relatives.

I will now have to consider how to respond to the council if I’m unlikely to get a licence.

Thank you again for your help, I’ve struggled to find any useful information or anyone in a similar situation, 

[Martin3344]

Sorry about the bad news @Emma3765 but I'm glad that the information has at least been of help. It is indeed a dire situation for self catering in Edinburgh and elsewhere in Scotland just now, driven by a misguided political agenda that is going to do enormous damage to the tourism industry in Scotland. The ASSC has been lobbying hard in recent months, with firm evidence and facts, but they are just finding deaf ears.

The regulations do provide for temporary licence exemptions, at a cost, but only for up to 6 weeks on a continuous basis in a 12 month period. However this would undoubtedly still expose you to the 200% council tax surcharge I'm afraid.

I am sure that there will be many people in a similar position to you, but there are no easy answers I'm afraid to your predicament. I can only wish you good luck in finding the best way forward through the current difficult circumstances that we are all sadly finding ourselves in to various degrees.

[Martin3344]

@Emma3765

One further update hot off the press today !

You may perhaps want to look into this decision that was taken at the Edinburgh Planning Local Review Body committee today (Item 6g on the agenda). There is a public webcast of the committee discussion of this item.

Planning permission was unusually granted in circumstances that sound quite similar to your's. You could maybe look into all the background documentation on the Edinburgh Council Planning Portal to see whether there is a possibility that you could establish a similar case for your circumstances.

It is currently a very rare occurrence in Edinburgh, but if you are able obtain STL planning permission on a similar 'ancillary use' basis then you could potentially obtain an STL licence and avoid the 200% Council Tax surcharge.

Planning Local Review Body (Panel 2) - Wednesday 21 February 2024, 10:00am - Start video at 2:14:44 ...

Maybe a bit of a longshot, but just in case this could provide a lifeline for you....

[Emma3765]

@Martin3344 You are very kind!  Thank you.  I shall delve into this now.