1st September 2026
Scotland has embarked on an unusual experiment in housing policy.
Instead of simply building more houses, councils have increasingly been given the power to make it considerably more expensive to keep a house as a second home or leave it empty.
For some owners, the additional bill is now twice the normal Council Tax. For others it is four, five or even six times the standard charge.
The question is whether this will actually put more homes into the hands of people who need them, or whether Scotland is simply discovering another way of raising money from property owners.
The answer is beginning to emerge, but it is far too early to declare victory.
The biggest change came on 1 April 2026, when the Scottish Government removed the previous national ceiling on Council Tax premiums for second and long-term empty homes. Councils can now set their own premium above or below the national default of 100%, depending on local circumstances.
That has produced some striking differences across Scotland.
The Western Isles was among the early adopters. From April 2024, Comhairle nan Eilean Siar introduced a 100% premium, meaning second-home owners paid 200% of the normal Council Tax. The council has now moved further, with a 225% premium from July 2026. That means an affected property pays 325% of the standard Council Tax bill.
The Western Isles has made no secret of the reason. The islands have severe housing pressures, particularly for local people trying to find somewhere to live, and the council wants owners to bring unused properties back into permanent occupation.
But the island experience also illustrates the difficulty of measuring success.
There have been indications that some properties have changed hands or been brought back into use, but that does not automatically mean the additional tax caused the change. Property markets move for many reasons. Interest rates, house prices, tourism, inheritance, owners' circumstances and the general state of the economy can all influence decisions.
That is the problem with almost every attempt to judge the policy.
If a second home is sold after the tax rises, was it the tax that caused the sale?
Possibly.
But we cannot simply assume it was.
Highland has gone much further
Highland Council has taken one of the most aggressive approaches in Scotland.
From 1 April 2026, second homes in Highland face a 300% premium, producing a total Council Tax bill equivalent to four times the standard charge.
The council intends to increase that further, with a 350% premium planned for 2027/28 and 400% for 2028/29. In other words, if those plans remain unchanged, the total bill could eventually reach five times the normal Council Tax.
This is a remarkable escalation.
Highland has particularly strong reasons for doing it. The council says it has more second homes and long-term empty properties than any other Scottish local authority and faces a major shortage of housing.
Its own housing challenge estimates that Highland may require 24,000 additional homes over the next decade, compared with anticipated completions of around 12,000.
The council is therefore trying to use taxation as one part of a much larger housing strategy.
And it has an interesting idea about what to do with some of the money.
Highland has launched a £1 million Empty Homes Fund, offering grants of up to £30,000 to help owners repair empty properties. In return, the properties are expected to be made available for affordable or mid-market rent for five years.
That creates a sort of recycling loop.
Tax the properties which are being kept out of the housing market. Use some of the resulting resources to help bring empty properties back into it.
It is an attractive argument.
But again, it needs to be tested against results.
Highland is not starting with a blank sheet
There is another reason the Highland experiment will be particularly interesting.
The problem is not evenly distributed across the region.
Highland's housing pressures vary enormously between Inverness, the Inner Moray Firth, Skye, Lochaber, Caithness and Sutherland.
The council's own work shows how important short-term lets have become in some communities. In Sutherland, for example, potential dwellings being used as short-term lets have been estimated at around 8%, compared with 6% across Highland as a whole. Dornoch has been estimated at 11.5%.
That does not mean every holiday let is taking a house away from a local family. Tourism is an important part of the Highland economy and holiday accommodation creates employment and spending.
But it does demonstrate the competing pressures.
A property can be economically useful as tourist accommodation while simultaneously being unavailable to someone who wants to live permanently in the community.
That is the balancing act councils are now being asked to manage.
And then there is the short-term-let question
One of the criticisms of the policy is that owners may simply change the classification of their properties.
A second home which is used as genuine self-catering accommodation can be moved from Council Tax to non-domestic rates if it meets the statutory requirements.
But it is not simply a matter of putting a property on Airbnb.
In Scotland, self-catering accommodation generally has to be available for commercial letting for at least 140 days in the financial year and actually let for at least 70 days. Evidence can be required by the Scottish Assessors.
That distinction matters.
A property that genuinely becomes a holiday business is providing accommodation, bringing visitors into the area and potentially supporting cleaners, tradespeople, shops, restaurants and other businesses.
But a property that is nominally converted into a holiday let simply to avoid Council Tax while rarely being occupied would raise a different question.
The rules therefore need effective enforcement.
Scotland is becoming a laboratory
The really interesting aspect of the 2026 changes is that councils are now taking very different approaches.
Midlothian has introduced a graduated system which becomes more expensive the longer a property remains empty. After 36 months, the premium can reach 500%, resulting in a total Council Tax charge of six times the normal rate.
Argyll and Bute has taken a much more cautious approach, imposing a 110% premium, meaning a total charge of 210% of the normal bill. The council says its first year of the earlier 100% premium produced positive early signs, including a reduction in recorded second homes and evidence of some properties being brought back into use. But it also acknowledges that other factors influence those changes.
Edinburgh provides perhaps the most fascinating counter-example.
The council approved a 300% premium for second homes, which would have meant a total charge of four times the normal Council Tax. But it suspended the increase and reverted to the existing 100% premium while it reviewed the policy and its potential effects.
So Scotland now has something approaching a natural experiment.
One council is charging 110% above the normal rate.
Another is charging 225%.
Highland is charging 300%.
Midlothian has gone as high as a 500% premium for properties remaining empty for more than three years.
And Edinburgh has effectively said: let's stop and see what the evidence tells us.
That could prove extremely valuable.
Does the tax produce homes or simply produce sales?
This is the central question.
If an owner sells a second home, that does not necessarily mean a local family buys it.
The purchaser could be another second-home owner.
It could become a holiday let.
It could be bought as an investment.
Or it could indeed become a permanent home.
Only the last outcome directly addresses the housing problem.
Likewise, if an owner converts a second home into a holiday let, the property may become more intensively occupied but it has not become a home for a local resident.
That may still benefit the local economy, but it is not the same thing as increasing the supply of permanent housing.
This is why simply counting the number of properties which cease to be classified as second homes could produce a misleading impression of success.
The real measure should be what happens next.
Does somebody live there permanently?
Is it rented to a local household?
Has it become affordable accommodation?
Or has it simply changed tax category?
There is also a question about fairness
There is a legitimate argument for higher Council Tax on properties deliberately kept out of normal residential use in areas where local people cannot find somewhere to live.
But there are also owners who are not wealthy investors.
Some second homes are inherited family properties.
Some belong to people who work elsewhere but retain a connection with their home community.
Some are used by families for part of the year.
Some owners may be trying to repair properties which cannot yet be occupied.
The Scottish Government's own guidance recognises this and says councils should consider individual circumstances and proportionality. It specifically identifies circumstances where a premium may not realistically influence the use of the property.
That is important.
A tax intended to change behaviour works only when the owner has a realistic alternative.
If somebody can easily sell, rent or convert a property, a large premium may change their behaviour.
If the property needs £50,000 of repairs before anybody can live in it, a huge Council Tax bill may simply make a difficult situation worse.
The next two years will tell us much more
It is simply too early to say that Highland's 300% premium is working.
It only came into effect in April.
The same applies to the much higher rates introduced elsewhere this year.
But there is now an opportunity to collect much better evidence than we have had before.
Councils should be tracking not just how much extra Council Tax they collect but what happens to the properties.
How many are sold?
How many become permanent homes?
How many become long-term lets?
How many become genuine tourist businesses?
How many remain empty?
And how many owners successfully challenge their classification or receive discretionary relief?
Those figures would tell us whether the policy is a housing measure or primarily a revenue measure.
There is a danger that councils could become enthusiastic about the money while losing sight of the original objective.
The purpose of the policy is not supposed to be to punish second-home owners.
It is supposed to change the use of housing stock.
That is a very different objective.
Scotland has therefore embarked on an unusually large-scale experiment.
The Western Isles has moved from double Council Tax to 325% of the standard bill.
Highland has moved to four times the standard bill and plans to go higher.
Midlothian has introduced a system that can eventually reach six times the normal charge.
Argyll and Bute is proceeding cautiously.
Edinburgh has pressed the pause button.
Within a few years we should have something much more valuable than arguments and anecdotes.
We should have evidence.
And that evidence needs to answer one simple question:
Did higher Council Tax actually put more homes back into the hands of people who need them, or did it simply change who owns them and how they are taxed?
That is the test that matters.