Meeting of the Parliament 30 September 2025
We have saved the best for almost last. Who does not want to be discussing council tax reform with me on a Tuesday evening? I am glad that colleagues in the Finance and Public Administration Committee have made it back in time from Lithuania for this.
Amendment 353 seeks to mandate ministers to undertake a property revaluation for council tax. We debated the issue at stage 2, when I moved a different but related amendment, and I have raised the matter in a number of other settings, so I will not rehearse all of that now. Suffice to say that it is absurd that we all pay council tax that is based on property values that we know are wrong and 34 years out of date.
Every party has recognised that our council tax system needs to change, regardless of what long-term reform looks like. We need accurate property values as a starting point for that reform process. Amendment 353 makes clear that ministers can make further regulations to not implement the revaluation if they do not wish to do so. Undertaking the revaluation would give us a data set on which to base future decisions about reform without committing us to any particular course of action, because I recognise the range of views across Parliament on where we should go with that reform. I think that we can all recognise the need to have the data on which to base those decisions.
Amendments 354 and 355 would allow councils to increase council tax on second and empty homes. I am grateful to the Government for working with me on those amendments. In 2023, we regulated to let councils impose a 100 per cent surcharge, if they wished to, on those properties. That worked—in one year, there were 2,500 fewer second homes in Scotland. That recognises the particular harm that is caused by the huge growth in holiday homes, particularly in rural and island communities.
On Arran, which is in my region, communities such as Lamlash are now approaching the point at which a majority of homes are either second homes or short-term lets. In other areas, such as parts of Skye and Wester Ross, they are already well past that point. That is destroying communities. I and other members spoke in detail about the impact that that is having on communities in my members’ business debate before summer recess, so I will not repeat all that now. The amendments would build on what the Local Government, Housing and Planning Committee agreed to at stage 2, which is lifting the 100 per cent cap for the surcharge—effectively, the 200 per cent overall cap on council tax—and allowing for council tax to be more than doubled on second and empty properties.
The amendments would complete the process by giving councils the power to increase the surcharge, rather than leaving it entirely up to the Government and Parliament. They would also allow ministers to produce binding guidance as to how that is applied, so that they can set sensible exemptions for situations such as locum general practitioner housing. I would have hoped that that would not have been necessary, but, unfortunately, the behaviour of a couple of councils has merited it.
Amendment 356 would make clear beyond doubt that ministers can write off the council tax debts of those who are experiencing or have survived domestic abuse, where, through joint and several liability, they are liable for the debts of their abuser.
I was glad to get the Government’s support at stage 2 for an amendment of mine—it features in section 51B—that will lead to a review of the scale of the debt and how we can address it. I hope that, following the review, ministers will be writing off that, frankly, repugnant debt. Survivors should never have to pay off their abusers’ debts.
Amendments 245 and 246, in the name of the cabinet secretary, change the time limit for the review that the committee agreed to at stage 2, from six months to a year after royal assent. I am happy to agree to that.
Amendment 357 would change the prescription or write-off period for council tax arrears. At present, under the Prescription and Limitation (Scotland) Act 1973, Scottish council tax debts are chased for 20 years, despite the fact that most other types of debt here are written off after five years, and council tax debt in England is written off after six years.
18:45I have raised that matter with the First Minister twice in the past month so, again, I will not rehearse the arguments in full. Briefly, however, people who have been unable to pay off their debts after five years of enforcement action will almost certainly be struggling, and sending sheriff officers to their door over and over again is not helping anyone. It costs councils a fortune in enforcement costs for the little that they are able to recover, and it has knock-on costs. For example, when those who are trying to pay off their council tax debts are then unable to pay their rent, they end up homeless, and the council needs to find them housing.
As Aberlour has detailed in its research and campaigning, the current system is not working for anyone. It is not working for those who are in debt and it is certainly not working for councils. That is why I am proposing that council tax debts be moved to the five-year limit that already applies to many other forms of debt to the state.
Amendments 358 and 386 would mandate ministers to use their existing powers to rewrite the current regulations that govern how councils collect council tax debt. That would give everyone the right to pay council tax on a monthly basis, which is not a right that we currently have. At present, if someone falls behind on council tax by just a month or two, maybe due to a sudden change in their personal finances, the council can make them liable to pay the full annual balance for that financial year. Councils regularly make things worse for those who are struggling by demanding those massive up-front payments, which are often thousands of pounds, at the exact point at which people can least afford it.
Amendment 359 would require ministers, when doing their reviews of short-term let accommodation—which were secured by Rachael Hamilton at stage 2—to consider the cut-off point at which a property goes from being liable for council tax to being liable for non-domestic rates. At present, Scotland is well behind Wales on that. In Wales, a property has to be available for 252 days and let out for 182 days in a year for it to move from council tax to NDR. In Scotland, it is just 140 days and 70 days respectively. If we matched the Welsh dates, we would have more short-term lets paying the second home council tax surcharge and fewer paying no tax through qualifying for 100 per cent NDR relief. Given the impact of short-term lets on housing supply everywhere from here in the centre of Edinburgh to Arran, I do not think that we should be making it easier for those people to reduce their tax contributions.
Amendment 361 would end the relief from land and buildings transaction tax for foreign militaries. In short, if President Trump’s military wishes to buy property in Scotland, it should pay its taxes like everyone else.
On a similar note, amendment 362 would end the Crown’s exemption from LBTT in Scotland for residential property. It is absurd that one particular billionaire gets a personal tax break. If my constituents need to pay LBTT when they are buying a property, I think that the King should, too.
Amendment 363 would allow ministers to impose a surcharge when companies are buying up residential property. At present, as the Land and Buildings Transaction Tax (Scotland) Act 2013 is drafted, we can set only one rate, which serves as both the additional dwelling supplement for individuals and the company surcharge. I want to separate those two surcharges to allow for greater targeting. In England, the stamp duty surcharge on companies is 17 per cent, while in Scotland, because it is tied to the additional dwelling supplement, it is just 8 per cent. Like the council tax debt collection rules, that is an area where the law in England is far more progressive than the law in Scotland, and we should fix that.
Amendment 364—I am almost done, Presiding Officer—would allow ministers to impose a surcharge on overseas buyers of additional property. To be clear, I note that it would not apply to people who are looking to move and live here. It would apply largely to the super-rich who are buying up homes here for holidaying or property speculation. The growing overseas ownership of Scottish land and property is a scandal that this Parliament should get to grips with.
Amendment 365 would allow ministers to impose a LBTT surcharge on the purchase of second and holiday homes in areas of linguistic significance. During the passage of the Scottish Languages Bill, we all acknowledged that the biggest threat to Gaelic-speaking communities is the rural housing crisis, and the key driver of that is second and holiday home ownership. Making it that bit more expensive to buy a second home in some of our most fragile communities would be an important tool for protecting Gaelic.
I hope that the cabinet secretary will respond positively to those proposals to fix elements of our property tax system that are, frankly, currently rigged against ordinary people and in favour of the wealthy few.
I move amendment 353.