‘Council tax reform proposals will harm developers and landowners’

Scotland’s property industry has warned of the underlying effects of the Scottish Government’s ‘failure’ to address a potential revaluation of the council tax base or re-structure the existing bands to introduce further higher value bands, following yesterday’s announcement by First Minster Nicola Sturgeon.

The Scottish Property Federation (SPF) branded the new package of measures on council tax as “disappointing” although still a “step forward” in terms of a reformed cap on council tax and the ability of local authorities to control their own revenues.

David Melhuish, director of the Scottish Property Federation, said: “We welcome the reform of the cap on council tax whereby the most expensive homes could only pay three times the level of the least expensive properties - and the fact that local authorities will have more power to control their own revenues – this is long overdue.

“We are, however, disappointed that there is no mention in the First Minister’s statement of a revaluation of the tax base or a re-structuring of council tax bands, which in our view are fundamentally necessary to making the council tax system fairer and relevant.”

The SPF has also warned that new powers proposed by the Scottish Government to enable councils to levy a tax on development and vacant and derelict land could have far-reaching and negative consequences for business and investor confidence in the property sector.

Mr Melhuish added: “The most concerning part of today’s announcement is the proposed new tax on vacant and derelict that aims to tackle land banking. We know that in many examples the barriers to development are within the planning system itself and we would urge ministers to avoid measures that disadvantage developers or landowners unfairly.

“There is a risk that such measures will effectively become a tax on development and investment that will penalise many property businesses for a problem which often isn’t of their making.”