This blog considers the number of second homes in Scotland and the policy measures that affect them (and provides an update to a previous blog first posted in September 2022).
Second homes are normally defined as a home which is not the owner’s main residence. How second homes are used, and for how long, varies. Some second homes might be occupied infrequently while others are regularly used as a holiday let or for a longer term private let.
How many second homes are there in Scotland?
Council tax data is commonly used to calculate the number of second homes. In this context, a second home is a property which is no-one’s main residence but is furnished and lived in for at least 25 days in any twelve-month period. However, this doesn’t include any second homes that are:
- used for holiday lets (they are classed as businesses and therefore pay non-domestic rates rather than council tax)
- rented out to other people for long term residential use.
Council tax statistics show that, in September 2024, there were 21,606 second homes in Scotland. Overall, this is a low proportion (1%) of all homes in Scotland.
But there are wide variations across council areas with clear concentrations in rural areas. Across Scotland, around 79 of every 10,000 homes is a second home. The highest rate of second homes was in Argyll and Bute (603) and Na h-Eileanan Siar (598) (see map below).
The impact of second homes
Given the various uses of second homes and their geographical concentration, it’s no surprise that research has identified that the impact of second homes on local communities is complex and multi-faceted.
There are concerns that a high concentration of second homes can increase house prices, reducing housing supply for local people. A lack of affordable housing can also affect local businesses seeking to attract workers to the area.
If second homes are left empty for most of the time, there could be a negative impact on the cohesion and sustainability of local communities.
On the other hand, there may be benefits from second homes. Second homeowners tend to be wealthier than those that don’t own second homes and if they regularly spend money in the local area this may benefit local businesses. Second homes used as holiday lets can also be crucial to support local tourist economies.
A review of evidence on second homes commissioned by the Welsh Government concluded that it was difficult to be precise about the breadth of impacts of second homes on housing markets in Wales. It argued that this “remains largely a matter of judgement, likely to be best made at a local (community) level”.
Similarly, the review concluded that there is currently limited evidence of the effectiveness of various policy interventions on the demand for second home ownership.
Scottish Government policies on second homes
The Scottish Government has implemented a range of policies to help the supply of affordable homes and measures to disincentivise the purchase of second homes through taxation and regulation.
Council tax on second homes
Legislation sets a 50% council tax discount as the default charge for accommodation that is not someone’s sole or main residence and gives councils the power to change that discount (although job-related dwellings and purpose-built holiday homes must have a 50% discount applied). For second homes, councils can:
- alter the level of discount, to provide a discount of between 10% and 50%
- offer no discount
- charge a premium of up to 100% of the standard rate, i.e. double the full council tax rate could be payable.
Councils cannot charge premium of up to 100% on property which has been unoccupied for at least 12 months if the property has been purchased by a new owner within the past six months and repairs or renovations are being undertaken.
The power to charge up to double council tax on second homes was introduced from April 2024 through regulations which followed a joint Scottish Government/COSLA consultation. The aim of the change was to give councils powers to help achieve the right balance in the use of housing to meet local needs, encouraging more homes to be occupied where necessary.
This change also brings policy in line with council tax for long term empty homes where a 100% premium can also be applied.
Councils have discretion as to how any variation in council tax charges for second homes are applied across their area; for example, they could take account of the area the home is in or the circumstances of individual owners. Further detail on the legislation is outlined in Scottish Government guidance.
For 2025-26, all 32 councils have applied an additional council tax charge for second homes.
There’s not yet data any national data on how much additional income increased council tax for second homes has generated since April 2024. The Scottish Government estimated around an additional £35 million could be generated each year if double council tax was charged on all second homes, assuming no behavioural changes.
Council tax statistics showed a 10% decrease in the number of second homes across Scotland in the year to September 2024, the biggest annual decrease in 10 years. Some of this is likely related to the second home council tax premium, although it’s possibly too early yet to gauge what impact the policy may have had on the operation of local housing markets and the supply of housing in local communities.
When the Local Government, Housing and Planning Committee took evidence on the regulations implementing the change, there were some positive comments that the measure, along with other policies, could help efforts to increase housing availability.
There was also some comment about potential behavioural changes, such as homeowners choosing to let second homes as self-catering accommodation, which is eligible for non-domestic rates, and may therefore benefit from small business rates relief, rather than council tax.
Additional Land and Building Transaction Tax
Buyers of additional residential properties must pay an Additional Dwelling Supplement (ADS), an extra amount on the total purchase price.
Not everyone paying the ADS will use the property as a second home; for example, some people may buy an additional property with the sole purpose of renting it out to a tenant on a long-term basis.
Prior to 16 December 2022, an extra 4% on the total purchase price of properties costing more than £40,000 was payable. To protect first time buyers, the Scottish Government increased the ADS to 6% from 16 December 2022 and to 8% from December 2024.
Short-term lets regulation
All short-term lets in Scotland must be licensed to operate. Councils also have powers to introduce, with the approval of the Scottish Government, short-term let control areas where planning permission will normally be required before an existing dwelling can be used as a short-term let. Licensing won’t necessarily reduce the numbers of short-term lets. The introduction of control areas, which some councils are considering, is more likely to reduce the number of short-term lets. Two councils currently have short-term let control areas: the City of Edinburgh Council covering the whole city and Badenoch and Strathspey (Ward 20) in the Highland Council.
Can the purchase or occupation of second homes be restricted?
People selling homes on the open market are free to choose who to sell to.
In limited circumstances, there may be a title condition that affects how owners can sell. For example, ‘rural housing bodies’ can use a rural housing burden (via the insertion of a clause into the title conditions of a property) to pass on a discount for the benefit of the local community.
Councils also have powers as planning authorities, using planning conditions or ‘section 75 agreements’, to restrict the use of the land and/or regulate activities on land that is being developed. However, Scottish Government Planning guidance states (see paras 49 to 51) that these “can be intrusive, resource-intensive, difficult to monitor and enforce and can introduce unnecessary burdens or constraints” and advises that their used should generally be avoided.
What next?
The Scottish Government /COSLA consultation had sought views on allowing councils to charge a council tax premium of more than 100% on second and long- term empty homes. However, such a change would need primary legislation and the Scottish Government is continuing to explore and consider this change, in partnership with COSLA, as part of the Joint Working Group on Sources of Local Government Funding and Council Tax Reform.
The Housing (Scotland) Bill is currently at Stage 2 (detailed amendment Stage). Ross Greer, Scottish Greens MSP lodged amendments to seek to devolve responsibility for the setting of council tax for unoccupied dwellings. During discussion on the amendments at the Local Government, Housing and Planning Committee on 6 May 2025, the Minister for Housing agreed in principle with amendment 191 which would remove the cap on increasing council tax for unoccupied dwellings. At the time of writing this blog the amendment had not been voted on.
Kate Berry
Senior Researcher, SPICe