From 1st April 2024, the Shetland Islands Council have charged 200% council tax for second homes and 125% council tax for long term empty properties. The Long Term Empty Levy will increase over 4 years as follows;

  • Financial Year 2024/25. Long Term Empty Supplement % = 25%. Charge to be applied = 125%
  • Financial Year 2025/26. Long Term Empty Supplement % = 50%. Charge to be applied = 150%
  • Financial Year 2026/27. Long Term Empty Supplement % = 75%. Charge to be applied = 175%
  • Financial Year 2024/25. Long Term Empty Supplement % = 100%. Charge to be applied = 200%

For the purpose of this consultation;

-       The Long Term Empty Levy refers to the charge detailed above, this year that is 125% charge

-       A ‘full charge’ means 100% charge at the standard Council Tax rate, with no supplement or levy added

-       A ‘discount’ refers to the percentage discounted from a full charge

-      The second home supplement is a 200% charge

There are council tax discounts and exemptions prescribed in the legislation which the local authority must award, where eligibility criteria is met. The purpose of this consultation is not to consider such discounts and exemptions, as we have no discretionary powers in respect of these. For full details of the discounts and exemptions available, please visit the SIC website;

https://www.shetland.gov.uk/council-tax/discounts-exemptions

 

Councillors voted to impose the Long-Term Empty Levy and Second Homes Supplement in February 2024. This consultation is a means of gathering local views on the specific matters outlined below, as the Scottish Government have confirmed that local authorities have discretionary powers when applying the LTE Levy and Second Home Supplement.  

 

The results of this survey will be presented to Councillors to make a policy decision. We do not intend to publish the outcome of this survey. 

 

 

 

Long Term Empty Levy

 

The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2013 gave local authorities the right to impose an increase of up to 100% on the council tax where a dwelling has been unoccupied for over a year. On 22/02/2024, SIC Councillors voted to phase in the increase supplement over 4 years, as detailed in the table above.

 

Following the implementation of the Long Term Empty (LTE) Levy, we feel the following areas should be considered;

1. Where a building warrant has been granted to demolish the dwelling

The Assessors will only delete a property from the Valuation List once demolition works are completed to the extent the property no longer has the characteristics of a dwelling. However, in some cases it can take time between the building warrant being granted and the demolition works being completed. Under the current policy, we would charge the LTE levy in such scenarios, where the property has been unoccupied beyond one year. 

 

We have outlined possible options  below, please indicate which you would opt for.

 

2. Where a property sale is delayed due to forces out with the taxpayer’s control

Under the legislation, the LTE levy cannot be applied where the dwelling has been unoccupied for less than two years and is being actively marketed for sale or let. Currently such properties receive a 10% discount (90% charge). 

 

However, we have come across the following scenarios;

-       Property sales that have been delayed because of de-crofting issues or boundary issues with neighbouring properties. Some of these properties have been unoccupied for a number of years, but only recently inherited by the taxpayer. 

-       A property that could not be marketed for sale because of boundary issues with a neighbour. However, they could provide evidence of their intention to sell as well as legal action to resolve the issue preventing the property being marketed.  

 

We have outlined possible options below, please indicate which you would opt for.

 

3. Where a long term empty property has recently been purchased and a Building Warrant / planning permission has been granted

Under the legislation an unoccupied dwelling is exempt from the LTE supplement where;

-       There was a change in ownership, and

-       The property is undergoing repairs or renovations that contribute to the improvement of the property. 

Currently we award a 50% discount for the first 6 months from the change in ownership. 

 

However, we have received scenarios where the work has taken more than 6 months, due to the extensive work being undertaken. 

 

We have outlined possible options  below, please indicate which you would opt for.

 

Second Home Supplement

 

The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 gave local authorities the right to impose an increase of up to 100% on the council tax where a dwelling is a second home. On 22/02/2024, SIC Councillors voted to adopt the 100% increase for second homes. 

 

Under the legislation, a second home is a dwelling which is no one’s sole or main residence, but which is furnished and lived in for at least 25 days during any period of 12 months. 

 

Following the implementation of the Second Home Supplement, we feel the following areas should be considered, as the local authority has discretionary powers when applying the Second Home Supplement. 

4. Where the second home is a registered croft house

There are instances where taxpayers have a second home which is a registered croft house, which is occupied, not as a sole or main residence, for the running of the croft. Under the present policy, taxpayers in these circumstances are charged the second home supplement (200% charge).  

 

Please note there is a full council tax exemption available for unoccupied and unfurnished agricultural dwellings, where criteria is met. Details can be found on the SIC website. However, we are looking to gain information on croft houses described in the scenario above. 

 

We have outlined possible options  below, please indicate which you would opt for.

 

5. Where the second home is on an outer island / is required to commute from an outer island

 

Some of Shetland’s outer islands have a larger proportion of second homes on them. Some taxpayers have argued they are unable to occupy their second home as a main residence, due to the inability to commute to their place of work. For these purposes, the ‘outer islands’ are islands that do not permit daily commuting to a place of work, namely Fair Isle, Fetlar, Foula, Skerries and Papa Stour.

 

Similarly, a taxpayer who has their main residence on an outer island, may have a second home on the Shetland mainland, for commuting purposes. 

 

We have outlined possible options below, please indicate which you would opt for.

 


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