Some homeowners could face an annual council tax bill of up to £5,000 if they leave their property empty for more than a year, MSPs heard today.
Holyrood’s Local Government Committee has approved legislation that would allow councils to double the council tax on empty properties and charge homeowners £500 if they try to hide their empty home from the council.
Housing minister Margaret Burgess is also considering making mortgage lenders liable for council tax on repossessed properties, rather than the debtor that has defaulted on their loan.
The SNP administration was accused of contradicting its manifesto pledge to freeze the council tax by Conservative local government spokeswoman Margaret Mitchell, who tried to have the legislation annulled.
MSPs voted along party lines to give local authorities the power to double council tax on empty homes, with four SNP MSPs outvoting Ms Mitchell and two Labour MSPs.
One SNP MSP raised concerns about the legislation’s impact on families whose homes are left empty in unforeseen circumstances.
Stuart McMillan told of a family whose renovation project had been delayed due to ill-health.
Ms Burgess confirmed that this property would be treated as an “unoccupied dwelling” under the new law, and may be liable for a surcharge.
Councils will be given the discretion to decide whether to levy the surcharge and how much homeowners should pay up to a maximum of 100%, she said.
Council tax varies between local authorities, from £682 a year for the cheapest properties in the Western Isles to £2,460 for the most expensive properties in Aberdeen.
An empty Band H property in Aberdeen could be liable for a council tax bill of £4,920 if the council levies the full surcharge and finds no cause for exemption.
SNP MSP Stewart Stevenson, a former infrastructure minister, described the surcharge as “a very important piece of legislation” which will incentivise owners to bring empty homes into use.
He told of his difficulties in resurrecting a property in his constituency that had been left empty for more than seven years by a company based in Panama.
Committee vice convener John Wilson, an SNP MSP, questioned why repossessed homes will be granted an exemption from the new law, alongside those whose residents have been jailed or taken into long-term residential or hospital care.
Ms Burgess said: “When a lender repossesses, until the property is sold or auctioned the original owner of the property is still liable for the council tax.
“It doesn’t transfer the minute the property is repossessed, and if there is any equity in that property any liability will be paid from it.
“If you’re suggesting the lender should perhaps pay the council tax, I don’t know if we can do that but it is certainly something that we might look at.”
Mr Wilson said: “It would have been useful if we could have tidied up that situation in this legislation to try and release this burden of further debt to those who have had their homes repossessed.
“While we can’t change the legislation in front of us today, I would like to think the minister would take that point on board.”
The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013 will now be presented to the full Scottish Parliament for approval.