Edinburgh Abandons Second Home Tax After 1 Week

Scotland’s capital city has hit pause on a plan to charge second-home owners an extravagant tax rate, delaying a policy the city pitched as a way to get more primary residences back on the market.

The City of Edinburgh Council said it will suspend the 300 percent premium of the normal rate of council tax that began at the start of the month, instead issuing revised bills at twice the normal rate — matching last year’s level — while it reworks the rollout and consults affected owners, according to the BBC. The reverse was made a quick eight days after implementation.

The premium was approved February as part of the council’s wider response to housing pressure, after officials declared a housing emergency in November 2023.

Finance convener Mandy Watt said the council wrote to all impacted homeowners to confirm the suspension.

“This will allow us to engage on the impact of the rise and consider any amendments or exemptions to the policy,” Watt said, adding, “We’re sorry for any uncertainty this has caused.”

Officials expect discussions on potential changes to the increase — including the shape of the rate and possible carve-outs — to unfold over six months.

Under the council’s definition, a second home is furnished, used for at least 25 days in a 12-month period and is not the owner’s main residence. That definition captures a mix of discretionary second properties and homes used intermittently for work or family reasons, a detail likely to matter in any exemption debate.

For Edinburgh’s housing market, the delay injects uncertainty into policy changes that could affect owners and investors. While bills will remain at the prior premium level for now, the council signaled it is still working toward a higher charge.

The pause arrives alongside other housing-related funding moves at City Chambers. In February, councilors confirmed revenue from Edinburgh’s tourist tax will help finance approximately 500 affordable homes.

The visitor tax will be set at 5 percent on overnight stays in hotels, B&Bs and self-catering accommodation and will take effect on July 24. The funding pot to deliver nearly the approximately 500 homes has already been approved.

— Holden Walter-Warner