SNP could face legal challenge over tax on holiday homes
THE SNP’s new tax on holiday homes is facing a possible legal challenge amid claims the system could have a devastating effect on thousands of Scots.
The Scottish Mail on Sunday last week revealed the huge cost and scale of a licensing scheme for short-term rental properties which will punish owners and drive up prices for visitors.
Now, in a major intervention, the trade body which represents more than 1,000 self-catering businesses has announced it is in legal talks to mount a case against the Scottish Government.
Rental giant Airbnb has also warned of damage to the sector from the ‘complex and costly’ rules – which do not apply in England and Wales.
The scheme, which began last month, means those who have short-term rental properties, from traditional bed and breakfasts to castles, houses, single rooms, or even wigwams, must apply to their council for a licence to operate.
Owners are already reeling from soaring energy bills and even a former SNP Minister has hit out at the scheme.
Fergus Ewing told a Holyrood committee last year he thought the licences were ‘arbitrary, irrational and draconian’. The former Rural Economy Minis
Revealed: The devastating cost of SNP’s tax on your holiday home
ter said: ‘There are 17,794 self-catering properties in Scotland contributing £867 million to the economy and 23,979 full-time equivalent jobs.
‘All of these tens of thousands of properties will now have some fear that their business may be terminated.’
But his party pressed ahead with the legislation, and existing hosts and operators must apply for a licence by April 1.
Owners in Edinburgh have warned it will wipe out accommodation, threatening the existence of the city’s Festival.
The Association of Scotland’s SelfCaterers (ASSC) believes the situation is so grave it has instructed legal opinion on a challenge.
Fiona Campbell, ASSC chief executive, said: ‘Not only does the new licensing regime come with extra fees for shortterm rental operators to pay at a time of severe economic crisis nationwide, it also comes with a raft of additional red tape which adds to the burden already facing owners.
‘The situation is truly devastating, apocalyptic even, with 50 per cent of owners talking about leaving the sector altogether.
‘Owners of legitimate businesses are contacting us regularly with serious concerns about their mental health. If our sector was a large factory, employing thousands of people, shutting it down and wrecking the livelihoods of thousands of people would not be allowed to happen. We, as a sector, may be spread across a larger area but we are just as important.’
Ms Campbell added: ‘This is our livelihoods that are being taken away from us, whether because licences may be refused, or because the costs associated render businesses unviable. The situation is absolutely scandalous and we are now looking into a possible judicial challenge to this legislation.’
Yesterday a spokesman for Airbnb said ‘complex and costly licensing systems risk making it more difficult for ordinary families to benefit from hosting at a time when nearly half of hosts on Airbnb in Scotland say the additional income has helped them with the rising cost of living’.
Anyone operating without a licence faces fines of thousands of pounds. The Scottish Government said it ‘intends to increase the maximum fine to £50,000’ by 2026.
David Weston, chair of the Scottish B&B Association, said businesses were ‘already safetycompliant’, while Scottish Conservative MSP Miles Briggs said the prospect of a legal challenge ‘shows the strength of opposition to the SNP’s ill-thought-out plans’.
A Scottish Government spokesman said: ‘This legislation has already gone through the process of parliamentary scrutiny and been passed by MSPs. We are confident it is legally robust.’