Radical measures, including a potential 400 per cent increase in council tax on second homes, have been proposed to address the growing housing crisis in the Highlands.
Ailsa Raeburn, Chair of Community Land Scotland, has called for significant policy changes to alleviate the shortage of permanent housing, tackle homelessness, and support population growth in the region.
Argyll, and the highlands and islands, are facing increasing pressure on housing due to a rise in second home ownership and an influx of workers for major industrial projects. Ms Raeburn highlighted that while the region is an attractive place to live and work, the lack of affordable housing remains a critical barrier.
Ms Raeburn suggested that council tax on second homes could be progressively increased to as much as 400 per cent over the next decade. This, she argued, would disincentivise second home ownership and generate funds for affordable housing development. She also called for the reinstatement of policies ensuring that second home tax revenues are reinvested in local housing projects.
“Second home ownership is significantly reducing the availability of housing,” Ms Raeburn said during the Attwood Lecture at UHI Inverness. “We use taxation to change behaviours. Increasing council tax could encourage second homeowners to sell, returning properties to permanent use.”
Currently, Scottish councils can raise second-home council tax by up to 200 per cent. Some areas, such as the Western Isles, have adopted the higher rate. However, Ms Raeburn believes more drastic measures are needed.
She also advocated for changes to the Land and Buildings Transaction Tax, suggesting higher rates for second-home purchases. She emphasised that concentrated patterns of land ownership in Scotland, where around 450 individuals control half of the country’s landmass, exacerbate the housing crisis by limiting available development sites.
She pointed to the community of Applecross, where efforts to secure land for housing from a single estate proved nearly impossible, highlighting the challenges posed by monopoly ownership. “Monopoly landowners can dictate terms, making housing projects unviable,” she said.
A key element of Ms Raeburn’s proposals involves reforming Scotland’s outdated Compulsory Purchase Order (CPO) legislation. She argued that the current system, designed for large infrastructure projects, is too complex and costly for local authorities to use effectively for housing development.
“We need CPO schemes that are quicker and easier to implement, enabling local authorities and communities to develop small sites for housing,” Ms Raeburn said. “We cannot let landowners hold us to ransom.”
Examples from Colonsay and Applecross illustrate the lengthy and often contentious process of acquiring land for housing projects. Ms Raeburn stressed the importance of giving communities and housing associations greater powers to secure land at reasonable prices.
Ms Raeburn concluded by urging landowners to recognise their responsibility to contribute to local housing needs. “Landowners hold a critical asset that can deliver housing for local people. It’s time for them to come to the table.”
The proposals aim to ensure that Scotland’s land is used to support sustainable communities, enabling more people to live and work in the area while addressing the undisputed
housing shortage.
