Short term lets in £10m a year tax break

New analysis by Andy Wightman MSP shows that as visitors descend on Edinburgh for festival season, £10.6million of taxes are being avoided this year due to the boom in private homes being let out as holiday accommodation.

The Lothian MSP has been inundated with correspondence from constituents concerned about the loss of housing supply and an increase in anti-social behaviour. He has already warned that on current trends half the homes in the EH1 postcode will be holiday lets within a generation.

Andy’s latest analysis shows:

  • If a property is let for more than 140 days it becomes liable for non-domestic rates rather than council tax but only half of all such properties are declared.
  • If a property has a rateable value of less than £15,000, the Scottish Government provides 100% relief under the Small Business Bonus Scheme.
  • 83 per cent of short-term lets in Edinburgh that are declared for non-domestic rates have a rateable value below £15,000 and therefore don’t pay non-domestic rates.
  • If all short-term lets over 140 days per year paid non-domestic rates, this would generate £10.6million in additional tax revenue.
[avatar user=”andywightman” size=”200″ align=”right”]Andy Wightman MSP[/avatar]

Andy Wightman MSP said:

“It is disappointing that the Scottish Government has not conducted an economic impact assessment of the Small Business Bonus Scheme in the ten years of its existence. There is no justification for short term lets being exempted from paying £10.6 million in taxes to help meet the considerable costs of public services in Edinburgh. Thanks to this scheme and the failure to declare properties as short-term lets, landlords, many of whom are overseas investors, profit from these services without contributing a penny.

“I have been inundated by constituents concerned that the growth of holiday lets is causing more anti-social behaviour and denies people access to good quality housing for long term rent. It is time to bring short-term lets fully into the planning system and give the Council the powers to protect the availability of residential accommodation for the citizens of the City.”

[avatar user=”clairemiller” size=”200″ align=”right”]Cllr Claire Miller[/avatar]

Edinburgh Green Councillor, Claire Miller said:

“As Edinburgh’s population dramatically increases for our world-famous festivals and as visitors enjoy our historic built environment, it’s worth considering the impact that tourism is having on the City. Short term lets are a long-standing feature in Edinburgh to accommodate visitors during the festival but their rapid growth year-round is now threatening the residential character of the city centre in particular.