Council Tax on Second Homes
North Ayrshire Council · 12 February 2025
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NORTH AYRSHIRE COUNCIL 12 February 2025 North Ayrshire Council Title: Council Tax on Second Homes 2025-26 Purpose: To seek approval for the revision of the current policy on Council Tax charges for Second Homes within North Ayrshire from 1 April 2025. Recommendation: That Council agrees to: (a) Approve the revisions to the current policy to implement a 100% premium Council Tax charge on second homes from 1 April 2025; (b) Approve that 10% of any additional income received under this policy is ringfenced to support investment in affordable housing; and (c) approve the extension of the current provision for a 50% Council Tax discount for up to 12 months on recently purchased properties undergoing repairs or renovations to include second homes. 1. Executive Summary 1.1 On 14 February 2024 North Ayrshire Council noted the additional powers available to local authorities under the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023, which allows for the variation of the Council Tax charge for second homes from the current 100% charge to include a premium of up to a further 100% of the applicable Council Tax charge. However, the adoption of these powers was deferred pending public consultation on the proposals, including with our island communities. 1.2 In support of the Local Housing Strategy 2023-2028, it is anticipated that the adoption of these powers could help to mitigate the negative impacts of second home ownership across our communities, and in particular within our island communities, through the promotion of behavioural change across second home owners leading to a better balance between second homes and homes occupied on a more permanent basis, benefitting local communities and increasing supply in the private rented sector. 1.3 Although detailed monitoring on the potential impacts of these behavioural changes will be required on an ongoing, annual basis, it is currently anticipated that additional recurring Council Tax income of up to £1.883m per annum will be realised from the implementation of a 100% premium on second homes from 1 April 2025. It is recognised that, within the context of the scale of budget deficits facing the Council,
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this is an important source of recurring revenue that will help address the financial challenges and help protect vital Council services. 1.4 It is estimated that the impact of potential behavioural change, including the sale or rent of second homes, or the removal of properties from the Council Tax register to register them as self-catering businesses for NDR purposes, may reduce the recurring income by up to £0.577m. This will result in an estimated net additional income of £1.305m. Further, in view of the housing need across the area, and considering feedback from the Consultation process, it is recommended that 10%, £0.130m, of the net additional income would be ringfenced to support investment in affordable housing. 1.5 A Consultation via an on-line survey was undertaken between 10 October 2024 to 25 November 2024. Full details of consultation responses are included in Appendix 1. The responses were mixed and included perceived positive and negative impacts on any policy change. Due to the high proportion of second homes across our island communities, completed Island Communities Impact Assessments have been included for both Islands within Appendix 2. These assessments capture the unique characteristics of both island communities within North Ayrshire. 1.6 Additional provisions within the 2023 regulations introduce discretionary powers to align the treatment of second homes and long-term empty properties and allow a 50% discount to be applied where properties are undergoing repairs or renovations and have been purchased within the previous 6 months. 2. Background 2.1 During 2023, the Scottish Government undertook a consultation on Council Tax charges for Second Homes and Long-Term Empty Properties with responses submitted by both North Ayrshire Council, approved by Cabinet on 13 June 2023, and COSLA Leaders, who supported, in principle, a change to the Council Tax premium available to councils on second homes and empty properties of up to 300%. 2.2 The Scottish Government’s published outcome of the consultation highlighted the case for change, including: • Demand for second homes may result in a significant increase in house prices in that area; • Second homes can reduce access to affordable residential housing to meet local needs; • Low occupancy of second homes may also minimise the economic contribution to local communities and the sustainability of local public services; • Recruitment and retention of key workers may be negatively impacted due to a lack of affordable housing close to where they work. 2.3 Following the consultation, the Scottish Government published the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023, which came into force from 1 April 2024. Under these Regulations, local authorities have the power to vary the Council Tax charge for second homes from the current 100% charge to include a premium of up to a further 100% of the applicable Council Tax charge. This brings the powers available to local authorities in relation to second homes into line with those already in place for long-term empty properties.
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2.4 A review of Council Tax policies in place across other Scottish local authorities has indicated that the majority, including all other island authorities, have utilised these powers and introduced a 100% premium from 1 April 2024. The other two local authorities who did not adopt these powers from 1 April 2024 have confirmed that they plan to adopt the powers during 2024-25 or by 1 April 2025. Local Housing Strategy and Affordable Housing 2.5 North Ayrshire Council’s Local Housing Strategy was approved by Cabinet on 13 June 2023. This highlighted that 25% of privately owned homes on Arran and 43% of privately owned homes on Cumbrae are classified as second homes. It is recognised that each island has unique characteristics, with the challenges Arran around the need for more affordable housing, whilst Cumbrae has a higher proportion of lower Banded (A&B) second homes which may not necessarily lend themselves to more permanent living. The policy objective is to make the council tax system work as an incentive to prioritise homes for living in on a more permanent basis and increasing the level of home occupancy. It is anticipated that the adoption of the powers under these regulations will result in behavioural change across second homeowners. This could lead to a better balance between second homes and permanently occupied homes by encouraging second homeowners to use their accommodation differently, benefitting local communities, increasing supply in the private rented sector and even through switching to holiday letting that could have a net economic benefit in terms of greater levels of occupancy. Consultation Programme 2.6 During 2024, North Ayrshire Council undertook an extensive programme of engagement and Consultation with our communities, seeking feedback on a wide range of budget areas. The programme ran from 10 October 2024 to 25 November 2024 and was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. 2.7 Full details of the consultation responses have been included in Appendix 1 of the report. A total of 507 responses were received in respect of the targeted on-line survey, with many respondents being from the island communities i.e. 247 (49%) responses from Arran and 155 (31%) from North Coast and Cumbrae residents. 2.8 The feedback received was understandably mixed. In respect of the targeted on-line survey a total of 191 (38%) respondents favoured the premium levy being applied and 299 (59%) did not favour the levy. In terms of context, it is important to note that a total of 209 (41%) respondents identified as current second homeowners. Those in favour of the additional levy noted the impact of house prices and lack of affordable housing on Arran and a more general point that this could provide revenue for the Council and act as a deterrent to more second home ownership, commenting that as second homes are empty most of the time, therefore providing no significant contribution to the island economies. For those in favour, the majority of those supported a levy of at least 100%. However, those opposed to the proposals noted the contributions made to island economies by second homeowners. The majority of
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those who identified as current or potential second homeowners indicated that they would consider selling their second home or registering it as a business for Non- Domestic Rates purposes if the policy was adopted. Islands Communities Impact Assessments 2.9 Due to the high proportion of second homes on Arran and Cumbrae, it is anticipated that the utilisation of these powers will have a disproportionate impact on our island communities. Around 25% of privately owned homes on Arran are second homes compared with around 43% on the Isle of Cumbrae. In terms of the North Ayrshire mainland less than 1% of homes are second homes. As a result, and in accordance with the requirements of the Islands (Scotland) Act 2018, Islands Communities Impact Assessments have been completed for both islands to determine the potential impacts of the policy on our island communities. Full details of the assessments are included in Appendix 2 to this report. 2.10 It is recognised that both island communities are different. The Council tax Band profile of second homes on Cumbrae is such that 344 properties out of the 450 second home properties (76%) are either Band A or Band B. In Arran, only 118 properties from the 572 second homes (21%) sit across Band A or Band B. The property profile on Cumbrae reflects a higher number of smaller tenemental type properties, whereas Arran has a greater proportion of larger dwellings. In terms of addressing general housing availability and need, again there are distinct differences across both islands i.e. in Cumbrae it is recognised that the type of second home accommodation proportionally across Bands A and B may not lend itself or be suitable for permanent island living. Whereas in Arran there are significant challenges around the availability of affordable housing. 2.11 In summary, it is anticipated that this policy would influence behavioural changes across current second home ownership across the islands to bring more housing into use to support greater levels of occupancy through sale or private rental. It is also recognised that the behavioural shift could also lead to more holiday let properties. This would be through a modal shift from second home occupancy of at least 25 days per annum to the property being available for rent for 140 days per year and let for at least 70 days per year. Both shifts could have wider economic benefits to the local economy. It is also recognised that the extent of any behavioural shift will likely depend on the economic circumstances of the second homeowner. 2.12 As a further mitigation against any potential negative consequences, the impact of the proposed policy will be monitored to assess the extent of behavioural shift in property ownership models on the islands. This will include the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. With external support, house prices on the islands will also be monitored. The proposed policy also includes a further top-slice of funding to support investment in affordable housing for North Ayrshire. North Ayrshire Position 2.13 In line with the existing Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013, North Ayrshire Council currently levies a 100% charge for Council Tax on all second homes across the authority. This is made up of a 50% statutory charge, a 40% charge which is reserved to support the provision of new affordable housing and a 10% discretionary charge.
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2.14 While retaining the requirement to reserve 40% of the base Council Tax charge to support the provision of new affordable housing, the 2023 Regulations introduce additional powers for councils to increase the discretionary element of the charge up to 110%. This will take the total charge for a second home to 200% of the applicable Council Tax charge. This is consistent with the levy on long term empty properties introduced across North Ayrshire from 1 April 2017. Under these proposals the proportion of Council Tax charge reserved to support new affordable housing will be increased to include 10% of any additional income realised. 2.15 There are currently 1,476 second homes within North Ayrshire with the majority of them concentrated on Arran (Ward 4) and Cumbrae (within Ward 1): Band Ward 1 Ward 2 Ward 3 Ward 4 Ward 5 Ward 6 Ward 7 Ward 8 Ward 9 Total Cumbrae (Included within Ward 1) A 334 9 7 57 14 2 1 0 2 426 272 B 119 4 2 61 8 2 3 2 3 204 72 C 113 5 1 106 3 1 1 0 4 234 61 D 83 3 1 124 6 1 2 1 1 222 22 E 76 5 8 147 5 3 3 1 1 249 21 F 42 1 1 65 0 0 0 0 0 109 1 G 16 1 0 12 0 0 0 1 0 30 1 H 1 1 0 0 0 0 0 0 0 2 0 Total 784 29 20 572 36 9 10 5 11 1,476 450 Impact of Behavioural Change 2.16 As noted in the Scottish Government’s response to the consultation and the responses received from North Ayrshire residents, it is anticipated that the adoption of the powers under the regulations will promote behavioural change across second homeowners. However, these behavioural changes would also impact on the potential income levels realised by councils. It is anticipated that a number of current second homes could transfer to the private rental market, be sold or be subject to applications for registration as businesses under Non-Domestic Rates regulations. Potential Additional Income and Costs 2.17 Based on the current Council Tax charges across bands, it is estimated that the application of a 100% premium to second homes would result in additional gross income of £2.092m per annum, see Appendix 3 for detail. However, this would be Statutory Charge Affordable Housing Discretionary 50% 40% 10% 100% Statutory Charge Affordable Housing AH 50% 40% 10% Discretionary 10% + 90% 200%
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partially offset by an initial Bad Debt Provision equivalent to 10% reflecting potential difficulties in collecting the increased charges. This would reduce the anticipated net income from the increased charge to £1.883m per annum. 2.18 The potential impact of these behavioural changes is highlighted in Appendix 3 which notes that a 10% reduction in second homes resulting from the sale or private rent of second homes, returning them to the local housing supply, would result in a £0.188m reduction in potential additional income. 2.19 The potential impact of second homeowners removing their properties from the Council Tax register and registering their homes as businesses under Non-Domestic Rates regulations would include additional reductions in the statutory, affordable housing and discretionary elements of current Council Tax income levels. A 10% reduction under these circumstances would reduce current income tax levels by £0.201m and the potential additional income from the additional premium by £0.188m. 2.20 The actual levels of behavioural change and the impact on the Council Tax base budgets will be subject to monitoring on an annual basis as part of the annual General Services Revenue budget exercise. 2.21 As highlighted in the Medium-Term Financial Outlook 2025/26 to 2027/28 presented to Council on 9 October 2024 and the Long Term Financial Outlook presented on 13 December 2023, North Ayrshire Council has a gross funding gap of over £100m for the period to 2033/34. It is anticipated that any additional income realised from the application of regulatory powers in relation to second homes will be applied to address the financial challenges identified within the Medium-Term Financial Outlook 2025/26 to 2027/28. It is recognised that the proposed policy will help mitigate the impact of budget gaps and help protect vital Council services. 2.22 It is anticipated that the introduction of this premium will result in a significant increase in enquiries through the customer contact centre and the debt recovery team. To support this, it is estimated that 1.5 FTE additional staffing resources will be required at a cost of £0.068m per annum. In addition, the necessary changes to the Council Tax system will require system development investment. Work is currently underway to determine the potential costs. It is anticipated that the additional costs will be met from the additional income received. Additional Discretionary Powers 2.23 Under the 2023 regulations, further protection is being introduced for properties undergoing repairs or renovations. A 50% discount can be applied where a property is: • Undergoing repairs or renovations which contribute to the improvement of the property; and • The property was purchased by the person liable to pay the Council Tax less than 6 months ago. 2.24 The application of discretion to allow this discount for a period of up to 12 months aligns to the treatment under the existing long-term empty property policy adopted by Council on 7 November 2018.
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2.25 There would be no change to the current mandatory 50% discount for second homes which meet the definitions of purpose-built holiday homes or job-related dwellings, as provided under the 2013 regulations. 3. Proposals 3.1 It is proposed that Council agrees to: (a) Approve the revisions to the current policy to implement a 100% premium Council Tax charge on second homes from 1 April 2025; (b) Approve that 10% of any additional income received under this policy is ringfenced to support investment in affordable housing; and (c) approve the extension of the current provision for a 50% Council Tax discount for up to 12 months on recently purchased properties undergoing repairs or renovations to include second homes. 4. Implications/Socio-economic Duty Financial 4.1 It is estimated that the introduction of the additional Council Tax levy on Second Homes will result in net additional income of £1.305m. Following the ringfencing of funds to support additional staffing resources and an additional investment in affordable housing, £1.122m will be applied to address the financial challenges identified within the Medium-Term Financial Outlook 2025/26 to 2027/28. Human Resources 4.2 Additional staffing requirement have been identified to support the implementation of the policy change. It is proposed to meet the costs of the additional staffing requirement from the additional income realised under the policy. Legal 4.3 The Council will exercise its powers under the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023. Equality/Socio-economic 4.4 An Islands Communities Impact Assessment identifying the potential impact on our island communities has been included at Appendix 2. In addition, a full Equalities and Children’s Rights Impact assessment has been undertaken. The details of which are included in Appendix 4 of the report. Environmental and Sustainability 4.5 None.
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Key Priorities 4.6 This report directly supports the Council Plan 2023 to 2028 through the promotion of behavioural change to support the provision of homes that meet the needs of our residents, bringing empty building back into use needs and by maximising financial flexibility to support the delivery of our priorities. Community Wealth Building 4.7 None. 5. Consultation 5.1 The proposed Council Tax levy on Second Homes was included within the detailed community engagement undertaken during 2024 across citizens, community and stakeholder groups. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers Long-Term Financial Outlook 2024/25 to 2033/34 and Medium-Term Financial Outlook 2024/25 to 2026/27 – Council 13 December 2023 Council Tax on Second Homes from 2024/25 – Council 14 February 2024 Medium Term Financial Outlook 2025/26 to 2027/28 – Council 9 October 2024
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 0 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 2025 to 2026 Budget Engagement Findings Proposed Implementation of an Additional Council Tax Levy on Second Homes
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 1 of 28 PUBLIC INFORMATION PUBLIC INFORMATION Contents About this Document / Method .......................................................................................................................................................................... 2 Demographics ................................................................................................................................................................................................... 3 Survey Responses ............................................................................................................................................................................................. 5 Engagement Group Feedback .......................................................................................................................................................................... 24 Equalities – Overview of Survey Responses by Protected Characteristic ............................................................................................................ 25
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 2 of 28 PUBLIC INFORMATION PUBLIC INFORMATION About this Document / Method This document contains the summarised feedback from the 2025 to 2026 Council Budget Engagement undertaken between 10th October and 25th November 2024. It contains survey findings, engagement group feedback and where relevant, comments from trade unions. Due to the scale of the consultation, information has been analysed by theme as per the surveys issued: 1. Additional Council Tax Levy on Second Homes (this report) 2. Community Facilities and Car Parking 3. Schools and Related Services for Children and Young People 4. Service Delivery 5. Taxes and Levies 6. Waste Services This approach is more comprehensive than providing a single statistics or feedback document and enables quicker distribution to Elected Members and Officers for consideration. Please note: As the survey was divided by theme, if there is a need to combine findings across the engagement exercise caution should be used to ensure reference is made to the number of responses, rather than number of respondents. Open field questions produced an extensive amount of feedback, running to at least 10,000 words per survey. To make this manageable, this feedback has been examined manually and summarised for each question. As well as the summary, key examples of feedback are then quoted for each question to ensure the voices of our communities are directly visible. This text is as received by our respondents.
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 3 of 28 PUBLIC INFORMATION PUBLIC INFORMATION Demographics
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 4 of 28 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 5 of 28 PUBLIC INFORMATION PUBLIC INFORMATION Survey Responses 1. Do you think North Ayrshire Council should charge a council tax premium on top of regular council tax rates for second homes? 2. Please give reasons for your answer to Q1 SUMMARY OF RESPONSES: - Local economy and tourism impact. Many comments highlighted that second homeowners contribute significantly to the local economy, especially through tourism. They said increased taxes on second homes may discourage visitors and negatively affect local businesses and trades, potentially harming the fragile economy of islands like Arran and Cumbrae. - Fairness: There were a wide range of views about whether second homeowners should be pay an additional council levy, with some arguing that they already contribute via council tax and should not be taxed more for services they don't fully use. Others believe that higher taxes are justified, as second homes sit empty and exacerbate housing shortages for locals, particularly young people trying to get on the housing ladder. - Affordable housing: A number of comments focused on the need for more affordable housing for island residents, particularly for young people and workers, as second homes are seen as contributing to inflated housing prices and limited availability. ‘I live on the Isle of Arran. Having so many second homes on the island has meant that many people have been priced out of being able to live and work here. There is a crisis in terms of working age people on the island. The status quo is not sustainable for Arran and I am supportive of any measures that would deter future purchases of second homes and ensure that current owners are contributing appropriately to the local economy.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 6 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘This is simply a revenue raising proposal to Tax residents who own more than one home and there is no evidence at all that making these homes available to the open market will make them available to people who can afford them. It will have a chilling effect on the economy of both Arran and Cumbrae in that a number of people who are economically active will sell or abandon their second homes to detriment of the well-being of businesses on the islands This will depress the value of other homes on the islands as potentially the market will be flooded with the sales of second Holmes that persons can no longer afford No evidence has been given that extra tax will not be diminished by behavioural changes such as converting the second home into a self-catering property or in case of married individuals realign the ownership of their individual homes.’ ‘I live on an island where the majority of certain areas on this island are second homes. There is a difficulty for those who work on the island to find homes either to rent or buy. If there was more homes then shortages in the care sector may be able to be fulfilled.’ ‘I understand the reasoning. However many of the properties which are second homes on Cumbrae are small. Those who own them are not wealthy. Many have had them for years and chose to holiday here rather than go abroad where they would have had cheap package holidays and guaranteed sunshine. I am in my 70s and have friends who have owned these small flats for decades. They have supported the island's businesses through thick and thin and continue to do so. Some have bought these properties with a view to retirement. We pay council tax to support local needs. Bin collection, schooling, street lighting, upkeep of facilities. The second homeowners hardly use bins, have no children needing educated here and are a very light burden financially. There is a case perhaps for a heavier tax on those with second homes that are depriving locals of family sized homes. If you own a 2/3 bedroom accommodation then you are depriving a local family from that home, so perhaps a higher rate of tax could be implemented.’ ‘I reside on Arran there are a huge number of second homes and not enough homes for working people on the island. All business’ struggle to find staff as there is no accommodation for them but homes lying empty especially over the winter which doesn’t bring revenue to the island.’ ‘If people can afford two houses, they can afford a double tax.’ ‘There is a distinct lack of housing available on Arran. Second homes sit empty for long periods of time, not contributing to the local economy. Our young people have very little chance of getting affordable housing on Arran, so end up moving away.’ ‘There are over 50 homes for sale on Arran, many for considerable periods of time. Many are at prices far below an equivalent price locally in . While there is a lack of affordable housing especially for rental on Arran, the housing market is depressed, either because of limited local people with jobs with high enough income, more people leaving and the devastating impact that the ferry system is having on residents and businesses. I can accept an increase in the council tax will bring welcome money to the council, but even more houses for sale will not help Arran, there is simply no one wanting to buy them frequently. The number of houses on Arran is beyond the number needed for the local population, while many complain of the proportion of second homes on Arran, the number of residents per home is also low. Our bungalow was built in as a second home and has never been a main residence, it is not taking a home away from the community.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 7 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘Most of the second homes on Arran are of an unaffordable type for social housing so this is pointless unless they are being used to rent out as a business (I would suggest this is where you look rather than folk like us who don’t get commercial gain from our property) If you try to force house sales the very people who can afford to support the local through hospitality, economy & trades will be gone, and with that more youngsters will leave the island through lack of jobs. Increasing council tax is nothing more than another wealth tax. ‘ ‘Second homes bring much needed revenue to Arran for hospitality and trades. Income for this would be minimised if rely on residents.’ ‘Having lived on the island for 40 years I have seen house prices soar out of the reach of my friends' children. Workers coming here can't find rented accommodation. At the present time, a certain estate agent is actively pushing up house prices here by getting people with a lot of money to make silly bids for second homes, with a knock on effect to the whole housing stock. Unfortunately even this measure isn't going to put off the very rich.’ ‘As owners of a second home we would be forced to reduce the money we at present willingly spend on supporting the community on Arran. The services we use of local trades people - grass cutters, window cleaner, hedge cutter, carpet cleaner, painter and decorator, supplier of fuel, supplier of wood would all have to be curtailed. We would bring cheaper food on to the island as money would require to be saved - thus reducing the revenue of local shops. Given that we do not use the council’s provision of schooling this is an unfair tax on second homeowners. Given we use less of the bin collections as second homeowners this is an unfair tax on second homeowners. Given we bring to the island as second home owners friends and family who are members of the local golf club, who eat in restaurants, who support local businesses, who pay to use the swimming pool in the local hotel, who pay money to carry out holiday pursuits such as kayaking, who use the facilities of Auchrannie it seems totally unfair to penalise second home owners who in every way help the economy of this fragile island. ‘ ‘It's not good when people who live locally can't find anywhere to live when a third of homes on Arran are standing empty most of the time.’ ‘So many people who work on the island or wanted to work on the island are looking for accommodation and some have to leave the island or can't accept an offered job because they don't can't find any place to live. So many of the second homes are empty most of the time and because the owners are not here, they don't contribute to the island economy enough. It would be much better for the economy if they rented a room for the few weeks they spend on the island.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 8 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 3. If you have answered yes to question 1, what do you think the maximum premium North Ayrshire Council could charge should be? More information: - 50% premium is the same as one and a half times the normal rate of council tax. - 100% premium is double the normal rate of council tax. Premium Number of responses 0% 29 10% 3 20% 1 25% 3 50% 37 100% 145 150% 1 200% 11 300% 3 500% 1 1000% 1 Text Comments • 500000 • multiple layers • Perhaps variable based on the banding of the properties. Larger properties could absorb a large %age. • Vary according to house size/band 4. Please give reasons to your answer for Q3 SUMMARY OF RESPONSES: The comments reflect a wide range of opinions on an additional council tax levy for second homes, with a focus on balancing the economic benefits of second homes to local tourism and businesses against the need for affordable housing for residents. Key points included a desire for higher taxes (up to 100%) to deter second homes from sitting empty and potentially open up the housing markets on the islands with some advocating for even higher rates to make it financially difficult for second homeowners to retain properties. Others suggested that second homeowners can afford the extra tax and should contribute more. However, there is also concern that excessively high taxes could negatively impact the local economy, particularly if second homes are important for tourism, and that any increase should be carefully managed to avoid harming long- term residents, especially pensioners or families relying on second homes passed down through generations. ‘There is a need for more financial input in the communities where second homes and the roads, local resources including medicines/health is being drained and so support in these areas would enable local communities to thrive.’ ‘This would bring in extra revenue to the council and also perhaps deter people buying a second home to sit empty for the majority of the year.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 9 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘100% premium is not a big enough for most second homeowners to take notice.’ ‘Should be at least 100%.’ ‘If you can afford to run 2 homes you can afford double tax. Hopefully, it would discourage second homeowners.’ ‘It's a good way of the council being able to increase its revenue without affecting people who are struggling.’ ‘This may act as a deterrent for people only using the houses as holiday homes.’ ‘50% on my house is only £50 a month, which isn't going to put off a lot of buyers. Even 100% is affordable. 200% is £200 a month, which would make me stop and think about buying a second home here.’ ‘There is no justification for an increase. It would be detrimental to the economy of the island.’ ‘There is a balance to be struck between the importance of second homeowners to the local economy and an understanding that many will be family homes passed to the next generation , against the needs to the wider local community.’ ‘Second homeowners are to be encouraged as they cost the Council virtually nothing and apart from bin collections, they are costing a lot less than permanent residents so there is a case for charging them a discounted rate instead of trying to justify charging them more. A great percentage of second homeowners are pensioners who would be put under extreme financial pressure if their rates doubled. Many will already be struggling with the cancelling of the winter fuel allowance’ ‘Because we should be discouraging people from owning but not utilising their second homes. We should make it financially very difficult for people keep a second home exclusively for their own use.’ ‘Second homes are often bought by rich people - I know enough examples where 50 plus % of the asking price were paid for a house even without having seen it. This inflates house prices enormously and makes it unaffordable for young island families/workers/young people to rent or buy a property.’ ‘If there is to be additional council tax, 50 % would seem to be fairest . Is it possible to do it based on house value / council tax band ? I know there's a lot of small , cheaper flats in Millport used as holiday homes, some passed down through generations - but there are also family sized, far more expensive homes . Perhaps those with properties band c and over?’ ‘Fair enough to have a small premium on the people who have a second home but 50% or 100% is way too much.’ ‘Possibly a bit less than 50%. This would make enough of a difference to the Island's revenue but should not be too onerous a financial burden on owners.’ ‘Many of the holiday flats in Millport are tiny - too small for full time occupation other than perhaps by a single adult - and will be band A. I have no problem with these being second homes, indeed many were built for this purpose. Larger flats and houses with the potential to be family accommodation should be taxed more, especially in areas such as
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 10 of 28 PUBLIC INFORMATION PUBLIC INFORMATION Arran where there is a real shortage. Suggest a sliding scale with 100% applied to the larger properties.’ ‘Second homes are killing the community on Arran. The owners must be fairly well off to afford to keep two homes so I think that they should contribute more to the local community.’ ‘I believe that if somebody has the income to afford a second home, they likely have the income to afford 50% more on council tax. Raising it to 100% makes this less attainable for people and hopefully acts as a deterrent.’ ‘If you can afford to have a second home, you can afford to contribute more towards local amenities. A second home can have a negative impact on rural areas with poor housing availability.’ ‘If people can afford a second home, they can presumably afford a higher council tax charge. The tax premium could be higher, however, it's probably best to monitor the effects of the 100% premium before considering a further increase. Arran has an acute affordable housing crisis and the extra revenue raised could alleviate this. The consultation exercise states 40% of the funding raised is to be ring-fenced for Affordable Housing across North Ayrshire. Around 80% of second homes within North Ayrshire are located in Arran and Cumbrae and I feel that the Islands should get the benefit of this proportion of the money and Arran should have its own ring-fenced Affordable Housing Fund before it is made available to the rest of North Ayrshire. Also, this revenue should be made available for properly constituted groups such as the Arran Development Trust to construct more Affordable Housing on the island, before funding for any other Housing Associations or the Local Authority are given access to it. In monetary terms, the figure that could be made available for more affordable housing would be in the region of £1m per annum. As the Islands will deliver the increase and bulk of the revenue, they should be entitled to the bulk of the benefit first; both in terms of affordable housing and services.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 11 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 5. If you do, or were to, own a second home, please tell us what you would do if the applicable rate of council tax were to increase, and the ‘thresholds’ to be classed as self-catering holiday accommodation for non-domestic rates purposes stayed the same? More information: the current threshold for defining premises as self- catering holiday accommodation liable for non-domestic rates is it must be available to let for 140 days or more and actually let for 70 days or more in the same financial year.
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 12 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 6. Please tell us how you think changes to council tax might affect businesses in your area. SUMMARY OF RESPONSES: The comments received in the survey show a concern about the potential negative impact on businesses of a levy, particularly in tourist-dependent areas like Arran or Cumbrae. Many respondents highlight that second homeowners contribute significantly to the local economy, spending on local businesses such as shops, restaurants, and trades. Some felt that a potential decrease in second home ownership could lead to reduced tourism, lower spending, and closures of businesses, especially during off- peak seasons. However, some see a possible upside, suggesting that if these homes were rented out long-term, it could provide affordable housing for locals and attract more permanent residents, which might help businesses by providing a stable workforce. ‘Slight reduction in available short term rental properties would not have a massive impact on businesses. Important the balance is correct, as decimating the holiday let market would have a knock on effect on every business on Arran. Less available holiday lets may increase occupancy in local hotels & B&B's.’ ‘Cumbrae holds its own data zone in SIMD statistics. It has a very fragile economy which is dependent on income received from tourism. There surely has to be acknowledgment of this fact. Take the tourism away and the island will decline further. Also the recognition that if more housing became available to purchase or rent on the island the deprivation will still exist and in fact be increased. Many islanders do not have sufficient income, hence food larders, fuel poverty etc. They would not be able to purchase any new properties to the market and there would be many islanders who would lose income from holiday lets, cleaners who would not be needed, laundry that would not be needed etc. The businesses would all suffer. Maybe a recognition is needed that North Ayrshire consists of areas with different economic characteristics.’ ‘An increase in council tax revenue would help protect other services, which in turn help the whole of the local economy including all businesses. If more properties become holiday options, this could increase revenue for tourism based businesses, and local tradesmen.’ ‘This change may encourage people to sell their second homes, especially those used as self-catering accommodation. This could have a detrimental effect in the area as there could be less accommodation available to tourists.’ ‘If people are forced to sell homes, then island would need to rely on income from islanders. Also only very wealthy could afford second homes and they often spend less time on island contributing to community so more empty houses and less money in islands.’ ‘Accommodation is vital to people looking for employment on the island. At the moment available vacancies are not being taken because the applicants cannot find accommodation.’ ‘Most second homeowners accept we pay a premium for everything on Arran, but faced with large Council Tax rises it will be necessary to bring cheaper goods, materials &
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 13 of 28 PUBLIC INFORMATION PUBLIC INFORMATION employ trades from the mainland. We will also need to budget how much we now spend in restaurants & local shops so these will be affected also.’ ‘It is causing second homeowners and holiday homeowners to put their houses on the market. This will result in less holiday makers to spend their money in the shops and restaurants etc. so that will have a big impact on the economy of the Island.’ ‘If the empty houses were fully occupied, I don't think there would be a huge impact on local businesses.’ ‘If the raised council tax achieved its presumed aim to reduce second home ownership perhaps local property prices would fall, but I suspect that the disposable income of the owners may also fall and have an effect on retail, hospitality, building maintenance businesses. If all the second homes were occupied full time, then the local authority would have increased expenditure too.’ ‘As a resident on the Isle of Arran, raising the council tax would greatly affect the local economy. Second homeowners bring a significant amount of finance to the island and helps local businesses.’ ‘Property market would be badly impacted and house values would drop. Local shops, hospitality businesses, Plumbers, electricians, joiners, builders, gardeners, window cleaners would all lose customers if they lose second homeowners and the council would see a reduction in income and a probable increase in expenditure as permanent residents would use more council services than second homeowners.’ ‘Business would be boosted as there would be more permanent residents. This would give all year round business with locals using local businesses. It would also mean an increase in hotels, guesthouses and proper B&Bs turnover.’ ‘Freeing up empty homes for either long term letting or holiday letting would benefit businesses because it would help alleviate the staff shortages by providing housing or providing more tourism accommodation - both of which we need on Arran.’ ‘It would be good for businesses (pubs, restaurants, shops...) to have customers all year around and not only being flooded during the busy summer month. It would have a positive impact on communities if more houses were inhabited by people living and working on the island all year.’ ‘I think that businesses in our area would be adversely affected by more permanent homes because this would bring a lack of tourism which is the only industry on our island.’ ‘Arran is predominantly a holiday island and if you over tax the homeowners then they will just sell up and move elsewhere. We are already seeing the rental market in places like Edinburgh spiralling out of control due to meddling. Perhaps if more of these houses do come on the market then more islanders could possibly buy them but there then would be more benefits to pay out as a lot of islanders would lose their job as they work in the rental/holiday sector.’ ‘Speaking for Millport, holiday homes have been the life blood of the island and many are used by various family members and friends bringing trade to the island for generations even if a main holiday is taken abroad. It would lead to a loss of trade all round if these holiday homes were lost.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 14 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘If the revenue used can be used for affordable housing, more workers could settle on the island and businesses would be able to employ the workers they need to operate to their business potential. Many businesses and organisations currently have to provide live-in accommodation for team members. This is very costly and affects business sustainability. Health care, and education could also be delivered more effectively. More jobs could be created in trades, garden maintenance etc. There are currently shortages of workers in all sectors and island infrastructure is in a fragile state.’ 7. Please tell us how you think changes to the maximum council tax rate for second homes might affect your local area (social, economic, environment, community, cultural, enterprise). SUMMARY OF RESPONSES: The comments indicate differing perspectives on the potential impact of a council tax levy on second homes. There were concerns over the negative economic consequences of discouraging second home ownership, as many second homeowners contribute significantly to local businesses, particularly in off-peak seasons. Respondents worry that higher taxes could lead to property sales, creating a glut of empty homes, reducing tourism, and causing local businesses to suffer, with potential job losses and economic decline. Some see the possibility of more permanent residents and affordable housing, which could benefit the local community, reduce crime, and encourage local enterprise. A number of respondents felt that a levy could change the social fabric of island communities, leading to a decline in both economic activity and community spirit. ‘More opportunity for local people who live and work on Arran being able to rent or buy homes that become available, as house prices will inevitably take a slight drop. This will stop people having to leave the island as they cannot afford homes and boost the local economy by providing a workforce where unemployment is currently almost zero.’ ‘I would hope that this would boost the local economy as more working age people would be able to live and work on Arran. Many second homes lie empty for much of the year and are therefore not contributing to the local economy in any way.’ ‘If this proposal results in less second Homes being available for personal use or in other cases being available for self-catering use this will have deleterious effect on Economy of in particular the Islands in that it will restrict the number well-off tourist and families from spending money on the businesses on the islands.’ ‘So much depends on whether the council tax premium is high enough to return properties to market. Supporting local population growth and the economic, social etc that would come along side that. If it is not high enough then we would just have some additional income to support local services What would worry me is people exchanging holiday / second homes for camper vans with all if the problems they bring.’ ‘We need tourism for the economy, we need homes for the community. Business’ need tourism but also staff. People snapping up second homes have forced the house prices up making it difficult for local people to afford anything and a lot have to move off island as they have no choice.’ ‘The main sources of employment on Arran are Hospitality, Trades, Retail (shops) Agriculture & public Services. Four of these will be adversely affected by increasing the cost of owning a second home as owners look to make savings then local Employment
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 15 of 28 PUBLIC INFORMATION PUBLIC INFORMATION reduces (especially in Winter which is a hard enough time for local business to endure without Tourists) Community initiatives (such as Lamlash Improvements) will suffer from reduced donations & people will be discouraged from renovating or building new homes.’ ‘Our house is on the market but we can’t sell it because of second homeowners and holiday homeowners who are now trying to sell as they know about the council tax doubling and because of new regulations so we have been caught up in the middle of all this. We are trying to move off the Island to the mainland. The housing market seems to have collapsed on the Island now. It may result in bringing the price of property down. Also, there will be less holiday makers to spend their money in the shops and restaurants etc. so that will have a big impact on the economy of the Island.’ ‘The great majority of second homeowners have been supporting the local social/economic services for in many cases , generations and are on limited incomes and pensioners so increasing their council tax would be grossly unfair.’ ‘It may discourage people from owning property as a second home. That would reduce the number of visitors who have enough money to spend on leisure on the island. When I was younger, I brought family and friends to the island who happily ate at restaurants, used facilities such as Auchrannie, played golf etc - all adding to the economy and livelihoods of the local residents. I think the future of fewer second homeowners would greatly reduce that revenue.’ ‘It would have positive effects. Bars and restaurants would have more customers more equally spread over the whole year and not only the busy summer month. Perhaps this could mean that prices would come down and be more affordable for the island population. Perhaps some businesses might also suffer because second homeowners need work men for looking after their properties (mowing grass etc).’ ‘This will be very bad for Millport. A fragile island community will be hit hard and potentially destroyed by putting many people who love the island of Cumbrae in a position where they can no longer afford their 2nd home. As most of these homes are not suitable for you families on the island the negative impact will not be offset by providing more housing for people on the island looking to stay on the island as they are just not appropriate.’ ‘Introducing changes to the maximum council tax rate for second homes in our area would likely have a negative impact on tourism and the local economy. Many of the second homes are used as holiday lets, which attract tourists who contribute significantly to local businesses—shops, restaurants, and services. A reduction in the availability of these properties could lead to a decline in tourism, reducing income for local enterprises. Moreover, increasing taxes on these properties will not solve the housing affordability issue. The homes in question are typically valued in the hundreds of thousands, far beyond the reach of those seeking affordable housing. Instead of freeing up affordable homes, this measure could discourage investment in the area and diminish its appeal as a tourist destination, ultimately harming the local economy and community.’ ‘My concern in Millport is that we would end up with under-occupied holiday rentals and/or empty studio flats, many in buildings which are already in a poor state of repair. In particular properties as mentioned above which are band A for council tax and too small
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 16 of 28 PUBLIC INFORMATION PUBLIC INFORMATION to be permanent residences - it’s likely that increased council tax on these would mean less spent on maintenance.’ ‘Local businesses would suffer most, with that the island community would struggle and I’d imagine local people would be forced off the islands for work. If homes are put up for sale on mass, then many would lie empty indefinitely, potentially with the owners unable to pay mortgages and the tax bill. Then left to slowly rot as there would be little likelihood of a resale.’ ‘The standard of living for those who are at home here would drastically increase. More (affordable) housing would bring more families and professionals who in turn would make sports clubs, after school activities, choirs, etc more viable. More money would come to the area because people would live here all year round. The environment would also benefit greatly as second homes tend to have bare, often paved gardens, to make them easier to maintain. There would also be more money to invest in social activities, etc as well as enough people to make those viable.’ 8. Please tell us how you think the changes identified might affect any island communities. SUMMARY OF RESPONSES: The comments show a mix of opinions regarding the impact of a levy on second homes, particularly on Arran and Cumbrae. Major points that emerge include concerns about the economic impact, with many arguing that second homes play a crucial role in supporting local businesses, tourism, and the local economy. Several respondents worry that increasing taxes on second homes could lead to business closures, higher unemployment, and a reduction in tourism. Others expressed hope that a levy could lead to more affordable housing for full-time residents, potentially improving the availability of staff for local businesses. Many surveys responses referenced the ongoing ferry issues and infrastructure issues. In general, the comments reflect a strong divide between those who see potential benefits in reform and those who fear adverse effects on the island's economy. ‘Island communities could be very badly affected by the proposed increase in council tax for second homeowners because the tourist industry could collapse on the island and then there would be more unemployment.’ ‘This proposal has the potential to really harm island communities. If this forces second homeowners to sell then then it will not be the locals who can afford to buy them so there will be no benefit to them. If it is businesses that are sold or closed down then an already poor island "locally" will just become even poorer with less jobs to go for so forcing locals to leave the island and the population will just get older.’ ‘If it resulted in more holiday makers (i.e. the house was let out more) it won't make much change (only positive for businesses). If it were let long term or sold for full time residential then there would be more people around to build a community. However if every house was full time owner occupied there would be less accommodation available for holiday makers. In the short term that might be a problem for businesses who rely on tourists outside of Brodick, but longer term, more purpose built self-catering would be developed and ultimately a better balance would be achieved.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 17 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘I would hope that houses would become available for long term let and therefore supports the economic stability of the island’ ‘I agree with The Arran Development Trust Opinion: The ADT agrees with Doubling of Second Homes Tax, recognising it will have the biggest impact on Island Economies (Arran & Cumbrae), where around 80% of second homes within North Ayrshire are located. As such, the ADT feels the Islands should get most if not all of the benefits. There are approximately 1495 Second Homes in North Ayrshire and of these,1031 are on Arran and Cumbrae. The consultation exercise states 40% of the funding raised in this way is to be ring-fenced for Affordable Housing across North Ayrshire. The ADT believe that Arran should have its own ring-fenced Affordable Housing Fund before it is made available to the rest of North Ayrshire. Also, it should be made available for properly constituted groups such as the ADT to access to construct more Affordable Housing on the island and before any other Housing Associations/Local Authority have access to it and lost to mainland projects. In monetary terms, the figure which could be made available for more affordable housing would be in the region of £1m per annum. In summary, it is the ADT’s opinion that as the Islands will deliver the increase and bulk of the revenue, they should be entitled to the bulk of the benefit first; both in terms of affordable housing and services.’ ‘If less people owned second homes, the younger generation that were born and bred in the area would have a better chance of finding accommodation, therefore keeping jobs local.’ ‘If the revenue used can be used for affordable housing and the island is able to attract more workers EVERYONE on the island would benefit. The economy (which is stuck at pre-pandemic levels and in danger of falling further) would be able to grow. Quality of life would improve for the community, through better delivery of health and social care services, education, a more vibrant, thriving economy with more businesses operating to capacity. It is also exceptionally difficult to secure trades people to assist with garden or other maintenance projects, domestic/commercial breakdown and property building and improvement. Arran's infrastructure is currently crumbling .... money to build affordable housing would solve all of that.’ ‘Raising council tax on second homes generates greater income to invest on the island and recognises the greater contribution to the life on the island of those who live there year round to those who hold houses which are unoccupied for a majority of the year. Much more needs to be done; raising income tax on second homes feels a minimal step, but at least it goes in the right direction.’ ‘Many second homes on Cumbrae are very small, old flats which should be exempt from any increase council tax as bringing them to the open market is unlikely to attract full time residents. They are too small and energy inefficient to live in all year. Exclude Council tax A properties from the new charge. There are also a number of more modern family homes which stand empty for more than 40 weeks of the year which could be occupied all year and contribute to the local community at all levels if they were put up for sale. If not sold the owners should make a far larger financial contribution than they currently do to the island.’ ‘My family have been second homeowners on the island of Cumbrae since . Second home ownership was encouraged then, and it was
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 18 of 28 PUBLIC INFORMATION PUBLIC INFORMATION discounted at 50%. The Local Authority then encouraged a mixture of local home ownership and social housing so that there was a balance between locals/second homeowners/tourists/day-trippers. My feeling is that the island would suffer significantly if second-home owners were to be penalised by doubling Council Tax, when they use very little of the Council Services. It would also affect those considering purchasing a property in the future.’ ‘I hope it will encourage more locals to stay on the island and for young working families to come and live on the island. We need young workers to fill health and social care positions as well as working in tourism. Our primary school numbers are dwindling where they once thrived and it is impossible for local businesses to find staff to fill vacancies. If housing is unaffordable because of market forces, then island communities will simply die and islands become retirement destinations without the infrastructure to even support that.’ ‘The issue about the shortage of affordable housing is understood. However, penalising and driving out second homeowners is not the solution. Second homeowners bring valuable income to the island and many second homes have a value that would not make them affordable if they were sold. There could be a risk of subduing the local property market and that is detrimental to the whole island.’ ‘Cumbrae is a unique island, and policies that might be appropriate for Arran are not always suited to Cumbrae. The demographics, economy and property are very different, and a one-size fits all policy could not work for both. A more targeted policy is required that recognises the unique circumstances on Cumbrae and does not punish it for conditions on its larger neighbour.’ 9. Please specify whether your answer to Question 8 relates to:
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 19 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 10. Do you think there are any equality, human rights, children’s rights, socio- economic, wellbeing or island impacts in relation to the changes set out in this consultation? 11. Please give reasons for your answer to Q10 SUMMARY OF RESPONSES: Some of the key points in the responses include a perceived economic reliance of communities (particularly Cumbrae and Arran) on tourism and second home ownership, with many businesses fearing negative impacts from reduced visitor numbers and fewer second homeowners spending locally. A number of responses felt that that second homeowners, particularly those who have worked hard to afford their properties, are being unfairly penalised. The lack of affordable housing for local residents, particularly young people and essential workers, is another major issue, as second homes are seen to reduce the availability of properties for full-time residents. ‘In a country where many people are homeless, I do not believe that it would be a breach of any basic human right to restrict people from being able to have more than one home, without financial repercussions.’ ‘This is pure discrimination against second homeowners. Arrans economy is built on tourism & revenue from non-residents. This would badly affect the balance of the economy.’ ‘Living on the Isle of Arran and having a small second home on the mainland due to the unreliability of transport, attending hospital and other appointments and supporting family, I feel I would be greatly disadvantaged.’ ‘Grossly unfair to pensioners and single owners who do not have the financial ability to increase their already under pressure income and this will undoubtedly have a detrimental effect on their mental health especially on the back of the loss of their winter fuel allowance.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 20 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘Yes, I believe the proposed council tax hikes for second homes will have significant impacts on human rights, children's rights, and the socio-economic wellbeing of Arran as a traditional holiday island. These changes are not only financially harmful but also threaten the rights and stability of island residents, particularly families and children. Human Rights: Raising council tax on second homes disproportionately affects small property owners, many of whom are locals who have invested in the island’s holiday rental market as their primary or supplemental income. The right to property is a fundamental human right, and imposing steep financial burdens threatens this by forcing individuals to sell their homes or face financial hardship. Furthermore, these proposals infringe on the right to live in and enjoy one’s property without undue interference by the state. Children's Rights: The potential economic fallout from these tax hikes directly affects children on the island. As businesses fail due to fewer holidaymakers, employment opportunities for families dwindle, leading to increased financial insecurity. This creates an unstable environment for children, with long-term impacts on their development, education, and mental wellbeing. Children have a right to grow up in a community where their families can provide for them without facing unnecessary financial pressure from local policy changes. Socio-Economic Wellbeing: Arran has been a traditional holiday island for decades, and its economy is deeply intertwined with tourism. The proposed council tax hikes will discourage holiday rentals, reducing visitor numbers and undermining the local economy. The loss of holiday homes and the subsequent drop in tourism income will have a devastating socio-economic impact, leading to job losses and the closure of local businesses. This will disproportionately affect low-income families and vulnerable individuals on the island, who rely on seasonal work and tourism-related income to survive. Island Impact: Arran, like many island communities, is already at a disadvantage due to its geographical isolation, compounded by years of ferry disruption. These proposed tax hikes could further isolate the island by reducing its appeal as a holiday destination, while driving up housing costs for residents. This would shrink the population and hollow out the island community, affecting the overall socio-economic fabric. Long-term, this could lead to the loss of cultural heritage as well, as fewer people are able to afford to live and work on the island. In conclusion, these changes will erode the rights of property owners, destabilize families and children’s wellbeing, and cause deep socio-economic harm to the island. We urge reconsideration of this damaging proposal in favour of policies that protect both the local economy and the rights of island residents.’ ‘The Millport community is made up of a large population of small second homes, a lot of which have been in the same family ownership for generations. The possibility of having to sell their homes due to the additional costs or reduce the amount of money they have to spend or number of visits will make a significant negative impact.’ ‘If the additional money raised can be spent on cheaper homes for young people to keep them on the island, then this will be a benefit. It means that people stop resenting the fact that I can afford two homes then this is an additional benefit.’ ‘Suggesting that there are negatives relating to equality, human rights and children’s rights arising from second home ownership on Cumbrae is laughable, based on zero evidence from the island. The impacts of the proposed change otherwise are likely to be negative if they lead to the majority of second homeowners seeking to sell their property.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 21 of 28 PUBLIC INFORMATION PUBLIC INFORMATION ‘I think if we lose 2nd homeowners because of council tax increases it would affect all aspects of local life. Some 2nd homeowners live permanently in North Ayrshire and already pay council tax to North Ayrshire. There would be no extra money being spent on the island by these owners who keep restaurants and local bars open and therefore local jobs.’ ‘Positive Wellbeing and socioeconomic impacts from island residents and families being able to choose to stay and live and work on the island instead of having to leave for jobs and accommodation on the mainland’ ‘People buy properties based on reasonable assumptions of the tax rules. Their property has already been expropriated when these rules have changed: council tax has already doubled (from 50%), stamp duty has been raised, and now another council tax rises is contemplated. These are effectively wealth taxes, which a number of countries have tried but then abandoned as they simply drive capital and enterprise to other places. The social and economic impact of the proposed changes would be the last straw for the islands' already faltering economies and the people who depend on them, since with agriculture being in decline, tourism (both short-term and long-term residency) is the life blood of the community.’ ‘Islands currently do not have equality with the mainland in terms of affordable housing provision. Many Island residents do not have an adequate warm, and well-maintained home due to the lack of affordable housing on the island and we have a shortage of workers on the island. More affordable housing created from this new revenue would be a game changer for Arran.’ 12. Is there anything else you would like to tell us in relation to this consultation? SUMMARY OF RESPONSES: The comments show a significant difference of opinion between those who are for and those are against the additional council tax levy. Of those who are against the levy, many indicate that they are second homeowners and feel they are being unfairly targeted despite already contributing to the local economy. They raise concerns about the negative economic impact on island communities, including reduced tourism, a potential decline in property values, and the loss of vital income. On the other hand, many respondents felt that the levy could discourage second home ownership, thereby leading to greater availability of housing for people, particularly on our island communities, and preventing young people from having to leave for the mainland. Of those who are not opposed to the levy, many emphasise that the revenue from increased taxes should be ring-fenced for the local communities directly affected, and that the focus should shift to developing affordable housing. ‘Maybe think about a 200% increase for new buyers and keep 100% for folk with existing holiday homes. A good number of the latter are very attached to their properties (obviously not all) and it would be sad to see them have to give up houses which have been in their families for generations.’ ‘Please bear in mind, that many Arran homes have Summer Houses for Back Houses, these second homes are classed as such as they are independent of the main house. But in many cases, they are in the gardens, use share utilities from the main house. These are not suitable for long term renting, they are not fully independent or accessible
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 22 of 28 PUBLIC INFORMATION PUBLIC INFORMATION to long term renters, they cannot be easily sold and separated off. This classification of a Back House should be explored’ ‘I think it's a poor and short sighted approach penalising people who have committed and invested in the island. Smacks of somewhere between easy opportunity and the politics of envy. Additionally it is my intention to retire to my second within 5 years. If the council tax doubles, I would seriously think of selling my property, and the appropriate capital gains tax, if any, going to central government.’ ‘Although I am a second homeowner, I don’t consider myself wealthy. I moved from a semidetached house to a flat in order to afford the second home. I need to live in the flat to help with childcare for my daughter so giving that up is not really an option. I maintain the second home which is old and that is difficult and costly. Managing to get work done while booking paying holidaymakers is very daunting. It is also a costly process to meet the licensing requirements. Nonetheless, I may be forced to make the house available for holiday lets. Making the second home my main residence would also be considered and given the frequency of my visits would not be impractical. It is probably worth bearing in mind that it is common for second homeowners to move permanently to the second home when they no longer need to live in the area where they are employed.’ ‘Second homeowners who actually use their second homes (either themselves or their friends/family) should be excluded from much higher council tax rates - they are contributing to the area’s economy. But they should have to prove that the houses are being used 50% of the time.’ ‘I am sadly aware of the misuse and avoidance of paying 2nd council tax on so called holiday homes, and many of my friends here are, too. One owner has listed their house as a self-catering residence to rent, which I presume is to get business tax relief but only the owners use it, and this year, and last year, it was used solely by them for 2 weeks.’ ‘If you insist on implementing this may be you should consider a “tier” system to council tax for second homes based on current levels - i.e. band A being exempt and higher up graded % charge not just a clean 50 or 100% levy. ‘ ‘There were 176 house on Arran claiming small business rates relief. That is paying no Council Tax. I personally know several of these are not Business's but second homes used for personal use. I believe the council has some oversight responsibility in administering this. If it is not made clear what checks to validate second homes claiming business rates relief, there will be a rapid move to claim Business Rates Relief without complying with the rules. The effect will be a net reduction in income to the Council.’ ‘Even if you ask all second homeowners what they would do, you don't really know what they would do until the scheme is implemented. I would expect that lots of second homeowners will say that they have inherited a family property that they don't want to sell because of the emotional connection and don't want to rent because of the (perceived) condition or not wanting strangers in their house. I get this, as I could not afford to purchase my family home when other relatives wanted to sell and so now someone else lives in it. It hurts that someone else lives in the home that I grew up in, but at least they live there full time and are active in the community and really that is what is more important. So my point is that other people have had the luxury of inheriting and being able to maintain their family home as very little cost to them and maximum cost to communities, they now have to choose, is it worth keeping it and paying the extra
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 23 of 28 PUBLIC INFORMATION PUBLIC INFORMATION council tax? If not, they have options including long term lets that would really help keep families on the island.’ ‘Please help Arran to get the affordable housing it needs with this new revenue which is being created from our island. With more affordable accommodation (and a decent ferry service) Arran will once again become a vibrant economy with a growing population and which needs less support from the public sector.’ ‘I assume that one objective of increasing the council tax is to reduce the number of second homes making more of them available for people on the island to buy. I don’t believe this will be achieved. I think the economy will suffer, reducing pay and jobs, making it even more difficult for people on the island to own their own home and make a living there. It will reduce the number of properties available to rent and reduce the number of people staying in the island. It may result in islanders leaving and reducing the population in negative spiral. Overall, I believe it will have a negative outcome.’ ‘I think second homeowners should have to pay a premium for these houses, it might put people off buying second homes. Many lie empty for the majority of the year and there are people in desperate need of housing.’ ‘I just hope that this is taken forward in some degree. I'm not sure it will have a huge impact but until we try something to rebalance island communities then I'm just not sure what else we can do. Islanders feel that their way of life and heritage is being slowly drained away. Where I live there are only a handful of actual native islanders along with a tiny amount of permanent residents. Perhaps there should be slightly different legislation for island communities with regard to owning a second home. While it is undoubtedly lovely to own a holiday home on a Scottish island, it is far from a necessity (or a human right!) and I for one would not be sorry to see the numbers reduced in whatever way is possible.’ ‘Perhaps to raise revenue consider taxing the camper vans upon entry. Maybe a consultation on a tourist tax and how the money raised could be used to improve the local community would be useful. I do not believe raising council taxes in this way will address a fundamental requirement for affordable housing on the island. If it goes ahead, it will likely take money away from the islands you are looking to support.’ ‘We did not buy our property - it is a family home which we were lucky enough to inherit. In doubling the council tax there is an underlying assumption that everyone who has a second home is wealthy and has the means to pay double the amount. If the proposed additional premium were proportionate and a reasonable amount / percentage, second homeowners might be well disposed to paying it if they knew it was going to be directly invested in increasing the provision of local affordable housing and improving the quality of life for islanders.’
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 24 of 28 PUBLIC INFORMATION PUBLIC INFORMATION 13. Please tell us which of the following categories best describe you (select all that apply): Engagement Group Feedback Redburn Grove Tenants Group This council tax premium should be enforced for second homes Three Towns Community Shed • If people can afford a second home, they can afford higher tax • Agree on proposal • Reduce cost of local property Healing Hearts Group This is a positive - should introduce it. Scottish Syrian Roses Most felt this would have no impact as it will only affect homeowners. Long Covid Group Agree to introducing it. Kilbirnie Residents - Syrian & Ukrainian New Scots Women Participants stated that people who own two houses “are rich”. Big ESOL class, Syrian, Afghan learners - If you use homes a business/trade, yes, because of income. - If second homes are used for family members to live in, no. Newtown Men’s Shed 100% agree with this. Online Consultation - Ukrainian • Two respondents agreed with the proposal. • Another was unsure, needing more information on the subject. • Two disagreed with one stating, ‘We need birth rate and population growth. How we can do it if we don’t have an affordable housing?’. NAFCO Should be implemented
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 25 of 28 PUBLIC INFORMATION PUBLIC INFORMATION Equalities – Overview of Survey Responses by Protected Characteristic Do you think North Ayrshire Council should charge a council tax premium on top of regular council tax rates for second homes?
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 26 of 28 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 27 of 28 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback - Proposed Implementation of an Additional Council Tax Levy on Second Homes Page 28 of 28 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback – Taxes and Levies Page 0 of 31 PUBLIC INFORMATION PUBLIC INFORMATION 2025 to 2026 Budget Engagement Findings Taxes and Levies
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Budget Engagement Feedback – Taxes and Levies Page 1 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Contents About this Document / Method ............................................................................................................................................................................................. 2 Demographics ..................................................................................................................................................................................................................... 3 Survey Responses: Apply a 100% Council Tax Premium on Second Homes ............................................................................................................................ 5 Engagement Group Feedback: Apply a 100% Council Tax Premium on Second Homes ......................................................................................................... 12 Survey Responses: Review of Non-Domestic Rates ............................................................................................................................................................. 13 Engagement Group Feedback: Review of Non-Domestic Rates ............................................................................................................................................ 17 Survey Responses: Charge a Tourist Visitor Levy.................................................................................................................................................................. 18 Engagement Group Feedback: Charge a Tourist Visitor Levy ................................................................................................................................................. 24 Survey Responses: Level of Increase in Council Tax ............................................................................................................................................................ 25 Engagement Group Feedback: Level of Increase in Council Tax ............................................................................................................................................ 30
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Budget Engagement Feedback – Taxes and Levies Page 2 of 30 PUBLIC INFORMATION PUBLIC INFORMATION About this Document / Method This document contains the summarised feedback from the 2025 to 2026 Council Budget Engagement undertaken between 10th October and 25th November 2024. It contains survey findings, engagement group feedback and where relevant, comments from trade unions. Due to the scale of the consultation, information has been analysed by theme as per the surveys issued: 1. Additional Council Tax Levy on Second Homes 2. Community Facilities and Car Parking 3. Schools and Related Services for Children and Young People 4. Service Delivery 5. Taxes and Levies (this report) 6. Waste Services This approach is more comprehensive than providing a single statistics or feedback document and enables quicker distribution to Elected Members and Officers for consideration. Please note: As the survey was divided by theme, if there is a need to combine findings across the engagement exercise caution should be used to ensure reference is made to the number of responses, rather than number of respondents. Open field questions produced an extensive amount of feedback, running to at least 10,000 words per survey. To make this manageable, this feedback has been examined manually and summarised for each question. As well as the summary, key examples of feedback are then quoted for each question to ensure the voices of our communities are directly visible. This text is as received by our respondents.
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Budget Engagement Feedback – Taxes and Levies Page 3 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Demographics
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Budget Engagement Feedback – Taxes and Levies Page 4 of 30 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback – Taxes and Levies Page 5 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Survey Responses: Apply a 100% Council Tax Premium on Second Homes 1. Following a Scottish Government Consultation, Councils now have the powers to vary the Council Tax charge for second homes from the current 100% charge to include a premium of up to a further 100% of the Council Tax charge. The main policy intent is to mitigate the negative impacts of second home ownership across our communities, including our island communities, through the promotion of a behavioural change across second homeowners which leads to a better balance between second homes and more permanently occupied homes. This could also help increase the supply in the private rented sector and benefit local economies with a shift in more housing occupancy throughout the year. Although modelling on the potential impacts of these behavioural changes will be required on an annual basis, it is currently anticipated that net additional recurring Council Tax income of up to £1.5Million per annum will be realised from the implementation of a 100% premium on second homes from 1 April 2025. This is an important source of revenue for the Council to help maintain vital services against a backdrop of significant financial pressures. The island communities of (Cumbrae and Arran have a high proportion of second home ownership. 30% of North Ayrshire second homes are located on (umbrae (451), 39% on Arran (580) and 31% on the mainland (464 properties). This policy would be applied across all North Ayrshire and it is intended to have the same impact across the whole area, with regards to initiating a behavioural change that leads to more home occupancy when compared to the current threshold of a minimum of 25 days per year. It is recognised however that the impact of such a change could be proportionately greater across the island communities due to the much higher proportion of second homes compared to primary homes for permanent island residents. This proposal will be supported by the completion of Island Community Impact Assessments for both island communities. A separate, more specific consultation will be undertaken on this matter which residents and businesses, particularly those most directly affected, will be asked to contribute to. This survey goes live on Monday 14 October and can be found here: https://northayrshire.community/consultation/
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Budget Engagement Feedback – Taxes and Levies Page 6 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 2. Have you any additional comments you wish to make on applying a 100% Council Tax Premium on Second Homes and on how you think people will be impacted? SUMMARY: - Support. Many commenters agree that second home owners, particularly those who can afford multiple properties, should pay a 100% council tax premium to contribute more to community services, given their use of local infrastructure and resources. There’s widespread consensus that those who own second homes can afford the additional cost. -Concerns about local housing market. A significant concern is the potential for second home owners to sell their properties, which could increase housing availability but may also push prices further out of reach for local residents. There is a call for the revenue raised to be used specifically to build affordable housing for local communities, especially in island areas like Arran. - Economic impact. While there is general support for the policy, some worry about its negative effects on tourism and local businesses, particularly in areas dependent on second homes for rental income. Many respondents who own a second home in North Ayrshire felt the levy would be unfair, particularly as they are less likely to make use of local authority services. Concerns about the impact on carers and exceptions for certain situations (e.g., elderly care or temporary ownership) were also raised. ‘Supportive of this. If they can afford second home they should pay its share for it.’ ‘I think this would have a positive impact’ ‘It should be 200%. No need for 2nd home when people can’t even get their 1st home’ ‘Certainly, if the house was lying empty after a certain amount of time but not if the house is occupied. Not fair on people buying for pension/investment purposes’ ‘Agree that a premium could release unused properties. However, should not penalise those who regularly use their second home (and therefore spend money locally). For example, to suggest that the premium should be lower where domestic properties are used by the owner for more than 100 days per year.’ ‘I would fully support this. This would especially benefit island communities.’ ‘It will have a positive impact in the short and long term. Additional money and perhaps the sale of some 2nd homes that are hardly used.’ ‘It penalises people who commit to an area and provide businesses with much needed investment 12 months a year. For many owning a modest second home on an island doesn’t mean you are wealthy but merely you choose to holiday at home - community wealth building in action. Many properties are so small (often one room) they aren’t fit for a permanent dwelling.’ ‘I live on Cumbrae where there are so many second homes that islanders born and bred struggle for affordable accommodation when they leave parent’s house. A great number of second homes would be ideal rentals or first time buys for 18-30 year olds. Full-time occupied properties are better for the island economy when folks access services on a daily basis and not just a percentage of the time. I personally would welcome a deterrent, premium or otherwise which would reduce second homes and boost the full- time population.’ ‘I think this is an excellent idea. So many houses lie empty for large parts of the year, even those which are rented as holiday lets are not full all year. If you can afford a second home, when some people don't even have a home, or gain income from a second property, you can surely afford to pay extra to benefit the community.’
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Budget Engagement Feedback – Taxes and Levies Page 7 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ‘I find this a tricky one, as there are people who would like to get on the housing ladder, however cannot afford to due to inflated house prices because of these people who own second homes. It has the potential to generate a considerable amount of revenue and that can only be a positive thing.’ ‘I'm strongly in favour, in principle, of applying a 100% council tax premium on second homes. A specific impact assessment on island communities would be needed to ensure it doesn't cause harm or disproportionate impact.’ ‘I think this is a great idea. Those who can afford second homes can afford to contribute more (often they are rented out so can levy on to those renting as holiday lets etc as people afford to have a holiday they can afford the increase) and also with two homes then they should pay for each of those and the impact it has on locals either being priced out of houses or not enough houses to home those who live locally.’ ‘This policy would be off putting to purchase property in the area and would negate the favourable home prices of the area. This would result in a cost for people who have family across the UK, who may travel for extended periods of time to maintain these family links and provide essential care for elderly parents, the extra cost may cease this and cause further burden on local care facilities. In such a tight economy, this would erode any form of house equity.’
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Budget Engagement Feedback – Taxes and Levies Page 8 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 3. Do you think the proposal will have a particular impact on any of the groups below?
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Budget Engagement Feedback – Taxes and Levies Page 9 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 4. Please use this space if you wish to provide further information on your answer(s) above. SUMMARY: The comments highlight a range of opinions on the proposed 100% council tax premium on second homes, with recurring messages on economic impact, housing affordability, and fairness. Supporters of the levy argue that it could help free up housing for local residents, particularly in areas like Arran and Cumbrae, where second homes are considered to have driven up property prices, exacerbating the housing crisis. Some see it as a way to create more affordable housing for young people and lower-income families, potentially alleviating deprivation. However, there are concerns about the negative economic consequences, particularly for small businesses reliant on second-home owners and tourism. Some fear it could reduce business continuity and reduce local economic activity. There's also a concern that vulnerable groups, such as older people, might be disproportionately affected, as a number of respondents pointed out they may be more likely to own a second home. ‘Second homes provide work to many sole traders across Arran and I am sure the same is the case in other communities. The net effect of reducing the work available to these groups needs to be taken into account.’ ‘Second home owners can be the stable lifeblood for small businesses who struggle during the winter months and have to battle against ferry disruption. They provide continuity and consistency to small business cash flow.’ ‘Young people will actually be able to get a home.’ ‘The number of second homes on Arran has grossly inflated the property prices. Low income families (even in full-time work) cannot compete with those wishing to buy second homes. Arran's economy is also not rewarded by houses sitting empty.’ ‘This is likely to free up accommodation making things easier for people experiencing deprivation.’ ‘It will just impact a comparatively fortunate section of society, most of whom can afford to pay a bit more. We should not believe dire warnings that the loss of some second homes will cause the economy to crash.’ ‘If this lead to more housing being released to the long term rental market then potential more young people would stay on the island.’ ‘It might be beneficial for those on low income if more properties are available to rent locally’ ‘This policy could impact lower-income residents by increasing local housing supply and potentially making permanent homes more affordable. Small business owners: Increased year-round residency might boost local businesses by providing a steadier customer base beyond seasonal tourism.’ ‘Cumbrae is a deprived community, and second home owners provide one of the main sources of income. Discouraging them would be devastating for the economy of the island and would effectively take money away from a deprived community for the benefit of North Ayrshire Council's finances.’ ‘Fewer tourists will impact small businesses on the islands.’ ‘For older people who have pushed their ability to take health benefits from owning a (in my case) small retreat that brings pleasure I feel that it will cut the less financially able off from this, I am not poor, I have got funds to manage this even if you did double but it would mean the cost of travel would be hit so I would not be able to make the trip to be here. I think many others would have the same issues. Wealthy people, I guess will not notice the change and I am sure will not really be affected. As I said above, and this second home, and it has been a home with new friends and activities, has been a mental life saver.
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Budget Engagement Feedback – Taxes and Levies Page 10 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ( Here, it is only money and I can fix that by better budgeting (selling and using the funds to stay secure at my other home). As we get older, there is so much less choice, at least here, I actually do have a choice. It is not much of a choice but I have it. Keep the second home and stop other economic activities or sell and maintain, of slightly improve my economic state. Mentally I can do this as I have time. Local, , we do not spend a great deal here but we do contribute to local shops for food, hardware for property maintenance, businesses that maintain property as we can afford. That will be lost. We do not run a car so we have to shop and live local. If we have to sell the new owners may stay full time will also contribute so maybe that will be a win for the local community.’ 5. Do you think the proposal is likely to have an effect on any island communities which is significantly different from its effect on other communities (including other island communities) in North Ayrshire?
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Budget Engagement Feedback – Taxes and Levies Page 11 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 6. If you answered "yes" to the above question, please use this space to provide further information. SUMMARY: The survey comments highlighted the opposing views on how such a levy might impact communities, particularly those on Arran and Cumbrae. Supporters of the council tax premium argue that it could free up housing for local residents by discouraging second home ownership, which drives up property prices and limits housing availability for young people and low-income families. Some anticipate that this policy could lead to more affordable housing options and reduce the housing shortage, benefiting the local community. However, many respondents expressed concerns that the policy could negatively affect the tourism-driven economies of the islands, as second-home owners are seen to contribute to local businesses. It was suggested that small businesses, especially in tourism and hospitality, may suffer from reduced spending, and the potential loss of second-home owners as tourists could harm local jobs and services. ‘This will have a positive impact on the island communities if some second homes are sold to more permanent residents.’ ‘There is a risk that properties on the islands released after this measure will remain unoccupied or move to non-domestic (holiday rental) use.’ ‘May have an effect on business footfall in Cumbrae/Arran’ ‘Would positively benefit Arran as may discourage so many homes being bought for holiday homes and create more housing for residents, as well as encouraging more people to work in social care roles on the island, which is impacted at the moment through a lack of housing.’ ‘It may drive a behavioural change in that some second homes may be sold, some may be put out for short term lets and some may be sold. The ones that are sold I am doubtful will be within financial reach for those looking for homes in the affected communities. You may want to consider how you encourage the second home owners to start lettng their homes for long term leases. This is probably not ging to cover the financial costs of the home and also make the home unavailable to the owner - so why keep it?’ ‘In reference to Cumbrae, there is an assumption there is lack of available housing preventing islanders from getting housing. I see no evidence that this is the case. Second home owners provide much needed cash flow to businesses throughout the year and are the difference between closing shop or staying open, and the consequent job implications of this.’ ‘I suspect that such a proposal will cause owners of second homes to consider selling. There will be an impact as a consequence on small businesses, particularly in Island communities.’ ‘This could result in a lot of homes coming on the market on the islands. It could reduce the number of tourists initially but it could increase the availability of affordable housing to members of the community.’ ‘Arran has an enormous amount of 2nd homes which, along with retirees, has had the effect of raising house and land prices considerably, hindering local peoples chances of buying their own homeland staying on the island. Whether a 100% council tax will alleviate this is debatable but is worth trying. There is a case for saying that local trades get a lot of benefit from work at 2nd homes but it should be recognised that there is an exodus of young people from Arran, which is reflected in the amount of mainland based personnel commuting here. Alarmingly for the social and health sectors, the age demographic on Arran has increasingly become older than the norm, possibly because 2nd home owner tend to retire on Arran, or pass the house onto family members.’
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Budget Engagement Feedback – Taxes and Levies Page 12 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ‘Clearly this will impact the islands. If people sell their second homes then this could lead to a flood of properties available. But then we need people to buy them and given they are islands this could prove difficult. We may end up creating a situation whereby the islands are less busy than they were before.’ ‘Most second home owners spend considerable time on the islands. This policy would reduce their disposable income to spend in the community. The absentee second home owners will not change their behaviour because of this.’ ‘Islands rely on tourism and although not tourists, second home owners and their families and friends spend a lot of money on the island’ Engagement Group Feedback: Apply a 100% Council Tax Premium on Second Homes Redburn Grove Tenants Group This council tax premium should be enforced for second homes 3T Community Shed •If people can afford a second home, they can afford higher tax •Agree on proposal • Reduce cost of local property Healing Hearts Group This is a positive - should introduce it. Scottish Syrian Roses Most felt this would have no impact as it will only affect home owners. Long Covid Group Agree to introducing it. Kilbirnie Residents - Syrian & Ukrainian New Scots Women Participants stated that people who own two houses are rich. Big ESOL class, Syrian, Afghan learners -If you use homes a business/trade, yes, because of income. -If second homes are used for family members to live in, no. Garnock Community Campus Umbrella Club Group directed to QR Code survey as ran out of time Newtown Mens Shed 100% agree with this. Online Consultation - Ukrainian •Two respondents agreed with the proposal. •Another was unsure, needing more information on the subject. •Two disagreed with one stating, ‘We need birth rate and population growth. How we can do it if we don’t have an affordable housing?’. NAFCO Should be implemented
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Budget Engagement Feedback – Taxes and Levies Page 13 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Survey Responses: Review of Non-Domestic Rates 8. Have you any additional comments you wish to make on the review of Non-Domestic Rates – Empty Property Reliefs and on how you think people will be impacted? SUMMARY: -Breathing new life into empty properties: Generally, there was broad support for this measure with many comments emphasising the need to discourage property owners from leaving properties vacant, and ensuring owners are accountable for maintaining or selling vacant buildings. -Community impact: Concern was expressed about the number of empty properties, particularly in town centres across North Ayrshire, which lead to negative perceptions of the towns and villages. A significant number of responses indicate that they believe that removing empty property relief could improve the appearance and vitality of town centres and attract new businesses or residents. - Exceptions for special circumstances: Several comments highlight the need for flexibility in implementing the policy, particularly in cases of probate, inheritance, or ongoing renovations. It was suggested by a number of respondents that exceptions could be made where properties are empty due to unavoidable circumstances like death, illness, or renovations that require time to complete. ‘Increasing the rates could encourage absent landlords to sell their properties for redevelopment or redevelop them themselves which in turn will support town regeneration’ ‘I don't think there should be any relief as people and communities have to watch buildings become derelict and unsuitable for anyone to use they are an eyesore to the look of a community’ ‘Removing empty property relief should encourage landlords to re-let property more quickly and could reduce rental levels. The relief subsidises landlords wishing to "hold out" for a higher rent.’ ‘I think this is another good proposal. There are so many empty properties which are being let go to rack and ruin so people should not be rewarded at all for having a poorly kept property. If you have a property you do not want to care for, you should not get any advantage from this. Removing rates relief might encourage people to sell unwanted buildings and this could benefit the community with new residents or new businesses as well as improving its appearance.’
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Budget Engagement Feedback – Taxes and Levies Page 14 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ‘Something needs to be done to encourage owners of empty property or land to do something with it. Giving them exemption from rates is not the answer and this proposal might actually help encourage some action. Unless in death I think this is a very good idea. There are too many empty buildings owned by people doing nothing about them and getting away with not making payment’ ‘Relief should be available in the case of a death.’ ‘It is exceptionally difficult to set up a new business on Arran at the moment due to the lack of housing for workers and the ferry crisis which has reduced visitor numbers. Therefore some properties may be empty because a buyer can't be found. Island problems differ from the mainland so there is a need for island proof policy.’ ‘I think a reduction in the availability of empty property reliefs would help to bring vacant properties back into use and have a positive impact on the visual amenity of the area. Too many properties are 'land banked', especially at key locations’ ‘Relief for empty properties is essential if work is being done and the building/ house cannot be occupied. In this day and age getting tradesmen is difficult and they can be booked up for months in advance so time needs to be available to allows homeowners to make the improvements otherwise building will just fall in to disrepair.’ ‘I believe this proposal will have a high impact on my community, particularly in terms of empty properties and their potential to be brought back into use. There are several vacant commercial and industrial properties in the area that are currently benefiting from 100% relief, especially those with listed building status. While I understand the need for fairness and the unique circumstances of property owners, extending 100% relief indefinitely may discourage property owners from seeking tenants or redeveloping these spaces. This results in long-term blight and missed opportunities for revitalising our local economy.’
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Budget Engagement Feedback – Taxes and Levies Page 15 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 9. Do you think the proposal will have a particular impact on any of the groups below?
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Budget Engagement Feedback – Taxes and Levies Page 16 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 10. Please use this space if you wish to provide further information on your answer(s) above. SUMMARY: A number of comments expressed concern about the potential negative effects on small businesses and vulnerable groups, with some fearing that the policy could financially burden smaller property owners. There is, however, support for using empty properties more effectively, especially to address housing shortages and create more affordable spaces. A recurring theme was that wealthier owners and property speculators who "land-bank" are more likely to be affected by the changes, which could encourage them to either sell or develop their properties. Additionally, a number of people suggested exceptions or relief for certain groups, such as those dealing with probate or community organisations undergoing property transfers. ‘I think this is most likely to have a negative effect on larger organisations and wealthy people, but it may also impact small businesses. It could also lead to some buildings being put on the market, which could improve things for small businesses’ ‘It depends on how effective any Council measures brought in actually brings about the desired effect. The former in Brodick is a prime example of a property and site which could be become an asset.’ ‘The only impact here is on people or businesses buying and banking land to offset against tax.’ ‘It will marginally affect the wealthiest people, but benefit to groups depending on public services will be significantly larger’ ‘There are many small businesses struggling just now. This could be the end of them.’ ‘People in certain socio-economic positions: If empty properties are brought back into use more quickly, this could help address housing shortages or lower the costs of renting, which could benefit those in lower- income brackets by providing more affordable housing options. Small business owners: Small business owners could be impacted by changes to Empty Property Relief, especially if they own vacant properties that are currently benefiting from 100% relief. The policy shift may affect their finances, encouraging them to either fill or sell these properties, potentially leading to more commercial spaces available for other local businesses.’ 11. Do you think the proposal is likely to have an effect on any island communities which is significantly different from its effect on other communities (including other island communities) in North Ayrshire?
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Budget Engagement Feedback – Taxes and Levies Page 17 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 12. If you answered "yes" to the above question, please use this space to provide further information. SUMMARY: The survey responses showed a largely positive view of how changes to empty property relief could impact island communities. Several respondents emphasised the need for policies that address the high number of vacant properties and their negative effects on local housing availability and the economy. Many believe the proposal could help revitalise abandoned or underused buildings, potentially improving housing stock and creating affordable homes for local residents. Many pointed out that island communities face unique challenges, including land banking and the deterioration of properties, and that any policy changes should be tailored to these specific circumstances. Some respondents note the need for careful consideration of the economic and social implications, including the potential for small businesses to be adversely affected by rising costs. ‘There is already a lack of accommodation on Arran. hopefully this will lead to more properties being brought back into use.’ ‘This could help the islands get old properties sorted for people to live in or work. This would be a good impact.’ ‘Arrival on Arran is blighted by derelict property close to the ferry terminal.’ ‘Yes, this proposal is likely to have a greater effect on island communities, particularly those with a higher concentration of empty properties, such as Cumbrae and Arran. These communities may face unique challenges with vacant properties, especially in terms of their impact on local housing availability and the economy. The proposal could incentivise property owners on the islands to bring buildings back into use more quickly, addressing concerns about long-term vacancy and blight. However, due to the smaller scale of these communities and the higher proportion of listed buildings or empty properties, the impact of the policy may be more pronounced compared to other areas in North Ayrshire. This could be both a challenge and an opportunity for island communities to revitalize underused spaces.’ Engagement Group Feedback: Review of Non-Domestic Rates Healing Hearts Group I’m not sure if this is relevant to this proposal however I would like it to be noted that I don’t agree with people letting their council home to somebody – they will doing this unofficially. Scottish Syrian Roses Participants felt this would only impact business owners. Long Covid Group Properties are empty sometimes to allow for repairs/maintenance to be carried out when one tenant moves out for the next to move in - the relief helps with this. Garnock Community Campus Umbrella Club group directed to QR Code survey as ran out of time Newtown Mens Shed 100% agree with this. NAFCO Fully support, unless building is being regenerated, improved there should be a concession whilst improvements being made, with conditions to monitor this.
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Budget Engagement Feedback – Taxes and Levies Page 18 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Survey Responses: Charge a Tourist Visitor Levy 13. Legislation passed this year gives legal powers to local authorities to introduce a Visitor Levy. The Act also requires that te council must publicaly consult on any recommended Visitor Legy scheme. The consulation must contain the following information for stakeholders to respond to: • An outline of the proposed sceme • Confirmation of instances where the Visitor Levy would not be payable • The objectives of the scheme and a proposal for how these will be measured • An impact assessment Following the consulation, the council must then consider adustments to the scheme and formally annouce its intention to implement a Visitor Levy to the Scottish Government and the public. This announcement begins an 18-month implementation period, after which the Visitor Levy can be implemented. At this time the council is currently awaiting further detailed guidance around the Visitor Levy scheme from the Scottish Government. An important consideration in developing the scheme needs to be ‘enough to be worth it’ in order to deliver a meaningful level of investment in North Ayrshire, but also be proportionate in terms of having no detrimental impact on the competiveness of North Ayrhire’s tourism offer. The levy would likely take the form of a % levy applied to visitor overnight accommodation stays up to a maximum nunber of overnight stays. The revenue generated, after deducting the cost of adminsiation, could be used to invest in council services and infrastructure to support the visitor economy. Although a draft scheme has still to be fully developed and this will be subject to further public consultation, some early feedback around the principles of such a scheme would be appreciated.
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Budget Engagement Feedback – Taxes and Levies Page 19 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 14. Have you any additional comments you wish to make on charging a Tourist Visitor Levy and on how you think people will be impacted? SUMMARY: - Concerns about impact on tourism: Many of the comments expressed fears that a visitor levy could discourage tourists from visiting North Ayrshire, particularly in areas like Arran, where tourism is vital. Some believe that adding extra costs during the cost-of-living crisis could drive tourists to cheaper destinations, both within Scotland and abroad. - Support for revenue reinvestment: Many respondents support the idea of a visitor levy, provided the revenue generated is reinvested into local tourism infrastructure and services, such as improving facilities, roads, and visitor experiences. Some point to successful examples in other countries (e.g., Majorca) where such levies have helped improve local amenities. -Concerns about fairness: A number of responses shared concerns about who would be charged the levy, with suggestions that Scottish residents should be exempt or that the levy should not apply to people visiting within their own country. There is also confusion over how the levy would be enforced and whether it would apply to day visitors, caravan users, or residents holidaying locally. ‘Tourism is vital to area. We are not facing issues like Edinburgh where visitor numbers have huge impact on local infrastructure. Hospitality is still struggling to add an extra cost for visitors is likely to exacerbate that.’ ‘This is common throughout the world. People pay to stay in lovely places. A few pounds a night will not stop visitors from coming to Ayrshire. ‘ ‘We are not a huge tourist town but we would like to welcome people to visit freely and spend their money in our area rather than taxing them. We need as many visitors as we can get.’ ‘It could be a positive introducing a levy if the money is used to improve all of North Ayrshire’ ‘I believe that implementing a Visitor Levy in North Ayrshire is a positive step towards promoting sustainable tourism and investing in our local communities. The revenue generated can be used to enhance our infrastructure, attractions, and services, making North Ayrshire an even more appealing destination for visitors’ ‘I don't agree with a Visitor Levy. It might be OK for busy places but in North Ayrshire we should be encouraging people to come and stay and enjoy our lovely area and a levy might put them off. Also, it might affect lower income people from having a break in the caravan parks.’ ‘Introducing a Tourist Visitor Levy is a sensible option in light of the current economic climate facing North Ayrshire. The area attracts a lot of tourists and I do not think this would have a huge impact on numbers - tourists are used to paying some level of local tax when travelling abroad.’ ‘Tourist accommodation is already expensive in Scotland. An area such as North Ayrshire should be encouraging tourists in order to expand the income of local communities rather than taxing them further.’ ‘There is no doubt that Arran's visitor numbers are considerable and that tourism is a double edged sword. Would a levy deter tourists, that may depend on the price put on a levy. It does seem today that tourism has no bounds and people will pay if they wish to visit any particular site/area/town/city’ ‘A visitor levy would be an excellent way to generate income without impacting local residents’ ‘As someone who works in hospitality, I am against the introduction of a visitor levy as it will unfairly impact on accommodation providers. It will also impact on local causes like Arran Trust.’
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Budget Engagement Feedback – Taxes and Levies Page 20 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ‘Most countries around the world now do this and tourist tax is now considered a norm. It would bring in money and not really discourage tourism’ ‘The Arran tourist economy is critical to the Islands economy. Tourism does have significant impact on the island and there are many way that this could be improved with further direct revenue. I would argue that Arrans visitor economy is not particularly price sensitive, but any additional direct costs would need to be carefully considered. How this would be applied across the wide angle of accommodation suppliers from hotels and guesthouses to Airbnb and private rentals would need to be consistent.’
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Budget Engagement Feedback – Taxes and Levies Page 21 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 15. Do you think the proposal will have a particular impact on any of the groups below?
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Budget Engagement Feedback – Taxes and Levies Page 22 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 16. Please use this space if you wish to provide further information on your answer(s) above. SUMMARY: Generally, many of the responses were concerned that a visitor levy could negatively impact small businesses, particularly in the hospitality and tourism sectors. Additional, concerns were expressed that that the levy may to increased costs, administrative burdens, and reduced competitiveness for accommodation providers like small hotels and B&Bs, and Airbnbs, potentially resulting in job losses and fewer opportunities for low-income and unskilled workers. There was also worries that the levy could deter visitors, especially those on tight budgets. ‘Small businesses would suffer if we introduced this tax and tourist numbers fell.’ ‘Small hotels, b&bs, airbnbs etc would suffer from this surely’ ‘I would expect the charge to be passed on to visitors to minimise the impact on local groups and businesses owners. It may impact people’s ability to visit the area to see family.’ ‘If small businesses which cater for tourism disappear, then there are less jobs for the young people on the island and less jobs for the unskilled worker.’ ‘Accommodation providers will have to administer the levy scheme at a high financial and time cost to their business.’ ‘Will reduce visitors, and therefore impact on people operating hotels. B&B, rental accommodation or hospitality. May reduce service jobs (waiters, cleaners etc) which will impact the lower paid workforce’ ‘There is no doubt that any levy, no matter how small, will deter those on a lower income from visiting Ayrshire. The small businesses in the hospitality and tourist industries are most likely to be affected by any reduction in footfall that the levy causes.’ ‘A Visitor Levy could disproportionately affect lower-income individuals or families, as additional charges on accommodation may make travel more expensive for those on tight budgets, potentially limiting access to tourism. Small business owners: Small accommodation providers, in particular, could face financial pressure from the levy, as they may need to raise prices to cover the cost of the levy, which could reduce demand or affect their competitiveness in the market.’ ‘Small Businesses working in accommodation could find the extra admin challenging and may not be in favour of a levy unless they could clearly see potential benefits to their business.’
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Budget Engagement Feedback – Taxes and Levies Page 23 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 17. Do you think the proposal is likely to have an effect on any island communities which is significantly different from its effect on other communities (including other island communities) in North Ayrshire? 18. If you answered "yes" to the above question, please use this space to provide further information. SUMMARY: The survey comments strongly agreed that island communities would be affected by a visitor levy. With tourism as a key driver of Arran and Cumbrae’s economies, concerns are raised that a visitor levy could disproportionately harm these areas due to their higher dependence on visitors, with potential negative impacts on accommodation providers, local businesses, and ancillary jobs. Many felt that the added cost of the levy, coupled with already high accommodation and ferry issues, may deter visitors, reducing footfall and revenue for small businesses. However, some respondents suggest that if the revenue is reinvested into infrastructure improvements, it could mitigate these effects. A further issue is the enforcement of the levy and ensuring it does not discourage tourism in areas already facing challenges like ferry reliability. A number of respondents also asked for a uniform levy across Scotland, to prevent unfair competition between regions. ‘It will discourage people from visiting as it’s expensive already to travel and stay in these places’ ‘The island communities rely on visitors to stay afloat. Any visitor levy must show visible local benefits both to residents and visitors.’ ‘Island businesses already have to deal with issues related to ferry disruption. This levy could add another burden to struggling businesses impacting the whole tourism economy’ ‘The bulk of the levy will be collected on the islands, but there is no mechanism to ensure the funds raised are used for island projects’ ‘Tourist accommodation on Arran is already very expensive. An additional levy and increase in cost may deter visitors.’ ‘The cost of living/doing business in Island communities is 15 to 40% higher than on the mainland. This tax would raise prices further and reduce price competitiveness. Island prices are already high and we need lower taxes to compete with mainland destinations.’ ‘I think most tourists to North Ayrshire are visiting the islands. However, I think they will still come, regardless of the extra charge’ ‘Yes in a positive sense - I hope it raises funding that can be reinvested into the local economy through new jobs or investment into community led regeneration projects.’
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Budget Engagement Feedback – Taxes and Levies Page 24 of 30 PUBLIC INFORMATION PUBLIC INFORMATION ‘Arran is much more of a tourist destination than mainland (North) Ayrshire. The accommodation costs there are generally higher and coupled with the recent ferry charge increases mean that any levy will be more likely to deter tourists - it could be the straw that broke the camel's back.’ ‘For island communities, tourism is one of the mainstays of the economy, and implementing this tax would be detrimental to not just accommodation providers, but many ancillary jobs and trades’ ‘I believe this proposal will have a significantly different effect on island communities compared to other areas in North Ayrshire. Island communities like Cumbrae and Arran rely heavily on tourism as a major part of their economy. Introducing a Visitor Levy could disproportionately impact these communities due to their higher reliance on seasonal visitors for economic sustainability. On islands, where tourism-related businesses, such as hotels, guesthouses, and bed and breakfasts, are vital to the local economy, the added cost of the levy could deter potential visitors, particularly those on tight budgets. This could lead to a reduction in visitor numbers, affecting both accommodation providers and local businesses that depend on tourist spending. However, if the revenue generated by the levy is reinvested effectively into infrastructure and services that support tourism, such as improving transport links or preserving local attractions, it could help offset some of these impacts. Ultimately, the challenge will be ensuring the levy is set at a level that is fair and does not undermine the competitiveness of the island communities as tourist destinations.’ ‘The large numbers of visitors to Cumbrae and Arran would raise revenue to support improvements to tourist related facilities and infrastructure - particularly roads, car parking and waste management/recycling facilities. Since the introduction of the Road Equivalent Tariffs for ferry transport the number of cars travelling to and on the roads of Cumbrae and Arran have had a noticeable negative impact on roads, litter and parking. Introducing this levy should raise funds to help address some of these impacts.’ Engagement Group Feedback: Charge a Tourist Visitor Levy Redburn Grove Tenants Group The members felt this would have a detrimental effect to North Ayrshire area for tourists. People may decide not to visit due to the tax levy being implemented. This is not a suggestion that should be considered. 3T Community Shed • Negative impact • Would people pay to visit a place that has nothing to do in it? Healing Hearts Group Don’t think this is a good idea. Nobody will go. This would directly affect my family. Project Art We like this idea but wonder if this would apply to us if we visited another place in Scotland, we feel this should only be for non Scottish residents as we would not like to have to pay a tourist tax for example if we visited Edinburgh Long Covid Group A great thing for Arran. Would work quite well. Would residents be charged this levy? Garnock Community Campus Umbrella Club Group directed to QR Code survey as ran out of time. Newtown Mens Shed This is not a good idea and could drive tourists away. NAFCO Fully support The main challenge we have is our tourist hot spot, suffers greatly from the poor Arran Ferry service and this has a substantial impact on what could generate a income for the council. Employee Disability Forum Discussion on impact for those with a disability - noted the Scottish Government website mentions an exemption from paying a visitor levy for people in receipt of disability benefits from the UK or Scottish Governments, assume this will be the same for people living in North Ayrshire.
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Budget Engagement Feedback – Taxes and Levies Page 25 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Survey Responses: Level of Increase in Council Tax When agreeing the Budget each year the Council also sets the level of Council Tax for the year. This is a vital source of income for the Council and accounts for around £65million, which equates to around 17% of the Council's total funding. In 2024/25, the Scottish Government provided additional funding to Councils to freeze the level of Council tax at 2023/24 levels. The Council's main source of funding is from the Scottish Government annual revenue grant. This funding has not kept pace with the cost of running day-to-day Council services which was significantly impacted by high levels of inflation over the last couple of years. When the level of funding does not match the cost of running services, this requires the Council to make significant savings to balance the Budget. For 2025/26, the projected budget gap is£ 16Million. If Council Tax were to increase by 5% in 2025/26 this would likely reduce the gap to approximately £13Million. This still presents a significant challenge to the Council. The more revenue that is generated from Council Tax the more vital Council services will be protected, however, it is recognised that this places further pressure on households. We are asking for your views on the percentage increase in Council Tax you would be prepared to pay. The Council's current planning assumption is for a 5% increase in Council tax for 2025/26. This would generate additional revenue of approximately £3.25Milli on. The tables below illustrates the likely additional revenue from each % rise in Council Tax and what the new levels would be for each band:
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Budget Engagement Feedback – Taxes and Levies Page 26 of 30 PUBLIC INFORMATION PUBLIC INFORMATION
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Budget Engagement Feedback – Taxes and Levies Page 27 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 20. Do you think the proposal will have a particular impact on any of the groups below?
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Budget Engagement Feedback – Taxes and Levies Page 28 of 30 PUBLIC INFORMATION PUBLIC INFORMATION 21. Please use this space if you wish to provide further information on your answer(s) above. SUMMARY: - Impact on low-income households. Many comments expressed concerns that council tax increases, especially during a cost-of-living crisis, are likely to disproportionately affect low-income households, pensioners, and those on fixed incomes. - Value for money. Several respondents said that while they accept Council tax rises are inevitable, they should correspond to improvements in public services. Many feel the services they receive, such as waste collection and public infrastructure, are declining while taxes increase, with many respondents expressing a sense of unfairness. -Calls for tax changes. While it is out of the council’s control, a significant number of responses suggested reforming the council tax system, by conducting a revaluation of property. Some suggest that a more progressive tax system could better distribute the burden of increasing taxes. ‘Most wages haven’t increased by 5%, seems unfair to expect working households to pay more when they aren’t earning more’ ‘We’ve had it frozen for years, it’s time to make a jump so we can actually have some working council services!’ ‘The best thing that could be done for council tax is a total fresh banding system that isn't as outdated and is fairer. Having people paying the same bands when houses are vastly different is ludicrous as is a lot of the properties sitting in the lower bands when they could be higher’ ‘As a disabled person that is now out of work due to my health I agree with a 5% increase’ ‘I would support a 10% rise in Council Tax in order to protect vital services, assuming people in low income categories are protected from this.’ ‘There has been a huge amount of additional housing over the past few years mostly band D and above with no significant increase in services. The proposal of 5% with a further 3% for each of the next 2 years adds a very significant increase of 11% to the already very tightly squeezed working family’ ‘An increase would have a severe impact on pensioners who are not claiming benefits. They are struggling enough with heating bills grocery bills etc. some people have stayed in the same house for 40 50,60 years and have paid for the upkeep of their homes themselves not buying selling and profiteering or getting new kitchens and bathrooms supplied and fitted by the council and they are now being penalised. It’s a disgrace.’ ‘This will obviously impact all council tax bill payers, but will hit pensioners harder as they are on a fixed income and have just lost the winter fuel payment.’ ‘this will affect families on low income and also working families who do not qualify for ctr and pay the full council tax - they will shoulder the biggest impact of the increase.’ ‘Any increasing costs are likely to impact on those on low incomes or more likely to be on low incomes’ ‘Low and fixed income households will be impacted negatively by this.’ ‘I personally think the Council has to bite the bullet and raise Council Tax - but it will most impact the people who can least afford it.’ ‘I understand that the Council faces significant budget pressures, particularly with the projected £16 million gap for 2025/26. While I recognize the need for additional revenue to protect vital services, such as
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Budget Engagement Feedback – Taxes and Levies Page 29 of 30 PUBLIC INFORMATION PUBLIC INFORMATION social care, education, and infrastructure, I also acknowledge the strain that a Council Tax increase places on households, especially those in lower-income brackets. A 5% increase in Council Tax could generate much-needed funds to support essential services, but it’s important that this increase is balanced with measures to support vulnerable individuals and families. The impact on local residents, particularly those already struggling with inflationary pressures, should be carefully considered. I believe that while a moderate increase may be necessary to protect services, the Council should also explore other ways to generate revenue or make savings, ensuring that the burden on residents is not disproportionately heavy.’ 22. Do you think the proposal is likely to have an effect on any island communities which is significantly different from its effect on other communities (including other island communities) in North Ayrshire? SUMMARY: Many respondents, particularly those who indicated they came from Arran or Cumbrae, said island communities already face higher living costs due to factors like limited job opportunities, expensive housing, and higher transport costs. Therefore, many felt that increases would disproportionately impact them. Additionally, many responses indicated a perception of a lack of infrastructure improvements on the islands like Arran, where some residents said they often felt neglected by the council. ‘Yes - high house prices on islands mean less money for those who live and work there.’ ‘Food, transport etc all cost more on island communities than on the mainland. Council Tax increases therefore have more of an impact here in terms of the percentage of our wages’ ‘There are a higher proportion of higher band properties (e.g. on Arran) that should be doing more to pay their way.’ ‘Council tax is already high in the island. Are we actually receiving what we pay for? It often feels like island services are less than those living on the mainland receive yet we pay higher tax.’ ‘It has the potential to impact business costs, holiday let costs subsequently impacting tourists and islander alike. Potentially due to rising costs of business being seen in the rising costs of lettings, products and business. it may also be a fairly small increased rise, however due to the economic climate, other rising costs and increase in employers outlay for employees e.g. recent wage rise, it may result in redundancies or loss of business.’
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Budget Engagement Feedback – Taxes and Levies Page 30 of 30 PUBLIC INFORMATION PUBLIC INFORMATION Engagement Group Feedback: Level of Increase in Council Tax Redburn Grove Tenants Group The members felt any increase would significantly impact all communities within North Ayrshire. Healing Hearts Group I agree to 1%. I agree to 3%. No to an increase if other recycling charges were implemented. I feel we compensate for those who don’t need to pay council tax/low tax. Everyone should pay something towards council tax. Scottish Syrian Roses Some participants were unsure of the impact as their husbands manage this aspect of their finances/budgeting. Others said that as they receive a discount on their council tax, a 5% increase wouldn’t pose an issue. Garnock Community Campus Umbrella Club Group directed to QR Code survey as ran out of time Harbourside Men’s Shed No more than 5%. NAC need to look at the higher management structure and the extremely high wage bill.
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APPENDIX 2 - ISLAND COMMUNITIES IMPACT ASSESSMENT ISLE OF ARRAN Please ensure this template is completed in conjunction with the Island Communities Impact Assessment (ICIA) Guidance on the Scot Gov Website Name of Policy, Strategy or Service Council Tax Premium applied to Second Homes STEP ONE – DEVELOP A CLEAR UNDERSTANDING OF YOUR OBJECTIVES What are the objectives of the policy, strategy or service? The policy objective is to make the council tax system work as an incentive to prioritise homes for living in on a more permanent basis and increasing the level of home occupancy. By applying a 100% premium on council tax for second homes, which would bring this in line with the position across long-term empty properties for North Ayrshire, it is anticipated this would influence behavioural changes across current second home ownership in Scotland and in North Ayrshire to bring more housing into use to support greater occupancy and it is also recognised that the behavioural shift could also lead to more holiday let properties. This would be through a modal shift from second home occupancy of at least 25 days per annum to more permanent levels of occupancy through sale or rental, and in the case of holiday lets, a potentially greater level of occupancy throughout the year against the measurement of the property being available for rent for 140 days per year and actually let for at least 70 days per year. Both shifts could also have wider economic benefits to the local economy. It is also recognised that the application of this policy could also generate additional revenue for the Council. This is against a backdrop of significant budget challenges for all Councils. The
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use of such statutory powers would help mitigate the impact of budget gaps and help protect vital Council services. Do you need to consult? The North Ayrshire Council meeting of 14 February 2024 agreed that a programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. How are islands identified for the purpose of the policy, strategy or service? This policy would apply across all of North Ayrshire. The Isles of Arran and Cumbrae have therefore been identified as being affected by this policy. A separate ICIA has been completed in respect of the Isle of Cumbrae. What are the intended impacts / outcomes and how do these potentially differ in the islands? – EMPHASISE HOW IT DIFFERS FROM MAINLAND The isles of Cumbrae and Arran have a high proportion of second homes. In North Ayrshire there are 1,476 domiciles classed as second homes i.e. a home not a primary home and occupied for at least 25 days per year. 30% of North Ayrshire second homes are on Cumbrae (450), 39% are on Arran (572), with the North Ayrshire mainland having 454 second homes (31%). It is proposed that this policy would be applied across all of North Ayrshire. It is recognised that both islands have a high proportion of second homes when compared to the mainland, therefore the impact of this policy could be proportionally greater across the Island communities than that of the
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mainland. It is also recognised that both island communities are different. The Council tax Band profile of second homes on Cumbrae is such that 344 properties out of the 450 second home properties (76%) are either Band A or Band B. In Arran, only 118 properties from the 572 second homes (21%) sit across Band A or Band B. The property profile on Cumbrae reflects a higher number of smaller tenemental properties, whereas Arran has a greater proportion of larger dwellings which are also impacted by higher house prices, driven by demand on the Island. The considered impact of the policy is that both Islands could benefit from increased levels of home occupancy when compared to the current level of occupancy through the second home ownership model. An increase in the level of home occupancy through a behavioural change, whether it be through sale or rent of the properties or through a switch to a holiday let, could have a net economic benefit to both island economies. In terms of addressing general housing availability and need, again there are distinct differences across both islands i.e. in Cumbrae it is recognised that the type of second home accommodation proportionally across Bands A and B may not lend itself or be suitable for more permanent island living. Whereas in Arran there are significant challenges around the availability of affordable housing. This ICIA is concerned with the impact on the Isle of Arran. Is the policy, strategy or service new? Yes, the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 was introduced by the Scottish Government following consultation and came into force on 1 April 2024, giving Councils the power to vary the Council Tax charge for second homes from the current 100% charge to include a premium of up to a further 100% of the applicable Council Tax charge.
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STEP TWO – GATHER YOUR DATA AND IDENTIFY YOUR STAKEHOLDERS What data is available about the current situation in the islands? • The Scottish Government’s consultation responses and report • Internal analysis of second homes profile across the island community and council tax bands • The Isle of Arran Local Island Plan • Arran Development Trust – Consultation response • Fraser of Allander Institute report ‘The Impact of Covid 19 on the Arran Economy’ Do you need to consult? Yes. The North Ayrshire Council meeting of 14 February 2024 agreed that a programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. How does any existing data differ between islands? Both islands have a high concentration of second home ownership when compared with the mainland. Around 25% of privately owned homes on Arran are second homes compared with over 40% on the Isle of Cumbrae. In terms of the North Ayrshire mainland less than 1% of homes are second homes. The council tax banding profile across each island is also markedly different i.e. Cumbrae has a very high concentration
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of Band A properties whereas Arran’s highest concentration is across Band’s D and E. This is set out below:- Band Arran Cumbrae Mainland Total A 57 272 97 426 B 61 72 71 204 C 106 61 67 234 D 124 22 76 222 E 147 21 81 249 F 65 1 43 109 G 12 1 17 30 H 0 0 2 2 Total 572 450 454 1,476 The Isle of Arran is the seventh largest Scottish island and is the largest island in the Firth of Clyde with an area of 432 square miles. It is the most southerly populated of the Scottish islands with Brodick, Lamlash and Whiting Bay on the east coast of the island being the main settlements. Arran is reliant upon its ferry services to transport residents and visitors to and from the island and to access medical and social services, to visit family and friends and for leisure purposes. The Fraser of Allander Institute report ‘The Impact of Covid 19 on the Arran Economy’ estimated that, on average, each day, the ferries contribute just under £170,000 to the island’s economy. This demonstrates the social and economic lifeline that the ferry provides to the island communities and businesses.
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In 2023, the total population of Arran was estimated to be 4,549. This represents a 12% decline in the total population of Arran since 2003. 54% (2,441) of the population is of working age. 7% of the population is aged 16-24, with 48% aged 24-64 and 34% aged 65 and over. It is estimated that, for 2022, the GVA (Gross Value Add) for Arran was £93.24 million. The top sector was ‘Manufacturing’, which had a GVA of £26.67 million. All but one of Arran’s data zones rank above the median (average) for the overall domain2 ranking. The access to services domain has some of the lowest domain ranks for Arran’s data zones, with five out of seven data zones ranking below the median, and two of those among the bottom 10%. The housing domain also highlights some key challenges on Arran, with six out of the seven data zones ranking below the median. Access to affordable housing is a key challenge for the Island. As of 2022, tourism related employment accounted for roughly one in three jobs in Arran. Key employing sectors on Arran are: ‘Accommodation and food service activities’ (30%), ‘Wholesale and retail trade; repair of motor vehicles and motorcycles’ (13%), and ‘Transportation and storage’ (10%). ‘Education’ and ‘Human health and social work activities’ are also important sectors, accounting for 9% and 6% of overall employment respectively. As of December 2023, Arran’s claimant count (estimate of people claiming unemployment related benefits) as a
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proportion of the working age is 2.8%. This is below the national (Scotland) average of 3.0%. The key priorities reflected in the Arran Local Island plan include:- • A reliable ferry service • Affordable housing • Health and Social care services • Early years provision on the island • Attracting labour • Tackling depopulation • Public transport on the island The Isle of Cumbrae is Scotland’s most accessible populated island and as such the island represents an important and unique island economy in North Ayrshire. Millport is the only settlement on Cumbrae. The island has an active and engaged community with a wide range of interest groups represented in the many clubs and associations on the island. The island has a reputation as an attractive visitor destination and is famously popular among cyclists of all ages thanks to a safe 10-mile, mostly flat, circular loop around the island. It is estimated that, for 2022, the GVA (Gross Value Add) for Cumbrae was £13.85 million. The top sector was ‘Human health and social work activities’, which had a GVA of £4.66 million. As of 2022, total employment on the Isle of Cumbrae was estimated at 425. The top three industries in terms of numbers
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employed are ‘Human health and social work activities’ (28%), ‘Arts, entertainment and recreation’ (24%), and ‘Accommodation and food service activities’ (16%). The claimant count (estimate of people claiming unemployment related benefits) as a proportion of the working age population for the Isle of Cumbrae was 5.7% as of December 2023. This is almost double the Scottish average of 3.0%. Further to this, in mid-2022, North Ayrshire Council prepared economic baseline report, which was an update to the October 2021 Economic Baseline. This report reviewed the available economic data for the Isle of Cumbrae to inform the development of a Cumbrae Local Island Plan. The key findings included:- Despite its unique strengths, the Isle of Cumbrae faces significant demographic challenges. Over the period of 2001 to 2020, the estimated total population of the Isle of Cumbrae has contracted by 12% – from 1,431 in 2001 to 1,262 in 2020. For the Isle of Cumbrae, the percentage share of the total population that is of working age is 11-percentage points lower than the Scottish level (53% compared to 64%), and the percentage share of the population that is aged 65+ is over double the Scottish rate (39% compared to 19%). To realise Cumbrae’s vision of becoming a sustainable and accessible island, three plan themes determine the Island Plan with a set of key priorities and related actions that build on the existing strengths of the island and minimise risk and further
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fragility to the community, economy and environmental wellbeing of Cumbrae. In the Communities theme the key priorities include:- • Reliable ferry provision • Affordable and Social Housing • Population – Attract working age families • Public transport and infrastructure • Access to health and social services • Effective community governance • Community Facilities The economy theme key priorities include: • Improving resilience of island business base • Diversification of economy and reliance on seasonal tourism • Improved tourism and retail offer • Education and skills and retention of young people • Recruitment and retention of employees • Employment opportunities Finally, the environment theme key priorities include: • Addressing energy costs • Climate action and sustainability • Protection of natural environment • Built and natural environment • Tourism management • Public transport and infrastructure
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• Flood prevention and marine / pier infrastructure Are there any existing design features or mitigations in place? Each island has specific challenges and they are reflected in the key priorities across each island. If you consider the current number of second homes across each island and how any behavioural shift could impact on the key priorities for each then it is recognised that a shift in housing models, through the application of a council tax second home premium, which leads to more home occupancy or permanent levels of occupancy, to support the island economy and help provide accommodation for those individuals who deliver key services across the islands, could have a net positive impact across a range of priority areas across both islands. They include:- • Health and Social care services (for staff accommodation) • Early years provision on the island (for staff accommodation) • Attracting labour (through more housing availability) • Tackling depopulation (through more housing availability) • Public transport on the island (through staff accommodation) • Affordable housing • Recruitment and retention of employees It is recognised however, that one of the specific challenges on Arran, illustrated through to the current property Band profile of properties, is the lack of affordable housing. In this case, more housing availability through the application of a second home council tax premium may not necessarily help address this issue in the short term, however there is a recognition that with
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a greater level of housing supply caused by second homeowners putting their property on the market or making available for rent, this could have a positive impact on bringing house prices down on the island. It is also recognised that the implementation of this policy would also likely generate additional revenue for North Ayrshire Council. Against a backdrop of significant budget deficits, this revenue would help protect vital Council services. Any modal shift in housing ownership models also must consider the impact on tourism on the islands. This is a vital element of the island economy across both islands. For clarity, this proposed application of a council tax premium for second homes relates to properties which are not the primary residence and are occupied for a period of at least 25 days a year. For comparison, properties which are made available for holiday lets for at least 140 days per year and are actually let for a period of at least 70 days per year, are not subject to council tax, rather they are subject to non-domestic rates. This cohort of properties will not be affected by this change, however, it is recognised that following the application of a council tax premium for second homes, it is anticipated that some current second home owners may then apply to be assessed for non-domestic rates purposes, subject to meeting the qualifying criteria. In such an event, this modal shift, whilst not directly contributing to the delivery of a greater level of permanent housing occupancy, would still likely have a net economic benefit to the island economy through a greater level of tourist accommodation provision. This will also have an impact on the level of revenue generated through council tax to the council.
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STEP THREE – CONSULTATION Who do you need to consult with? The Scottish Government ran a joint consultation with COSLA from 17 April to 11 July 2023 to seek views on the proposals to provide additional powers to councils allowing them discretion to: • Charge up to 100% premium (double the full rate) on council tax for second homes • Charge more than 100% premium on council tax for second homes and long-term empty homes There were 981 responses to the Scottish Government consultation: 73 from groups and 908 from individual members of the public. The consultation report is available online. The North Ayrshire Council meeting of 14 February 2024 agreed that a local programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey as part of the Council’s Budget Engagement programme. The consultation was open to all North Ayrshire residents, including island residents, business owners and current second homeowners. In addition, there was a more targeted on-line survey relating specifically to the proposal to implement an additional Council Tax levy on second homes which residents and businesses, particularly those most directly
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affected, were asked to contribute to. Feedback was also gathered from engagement groups. How will you carry out your consultation and in what timescales? The Scottish Government consultation opened on 17 April 2023 and closed on 11 July 2023. A North Ayrshire Council programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey as part of the Council’s Budget Engagement programme. The consultation was open to all North Ayrshire residents, including island residents, business owners and current second homeowners. In addition, there was a more targeted on-line survey relating specifically to the proposal to implement an additional Council Tax levy on second homes which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. What questions will you ask when considering how to address island realities? The Scottish Government consultation, which opened on 17 April 2023 and closed on 11 July 2023, asked 25 questions. Full details of the Consultation and responses is available here on the Scottish Government’s website. With reference to the consultation undertaken between 10 October 2024 and 25 November 2024, full details of consultation responses have been included in appendix 1 of the report. What information has already been gathered through consultations and what concerns have been raised previously by island communities? The Scottish Government consultation was open to all citizens and also included specific reference to Island communities. Of those answering the question, 55% of respondents thought that councils should be able to charge a Council Tax premium on top of regular Council Tax rates for these second homes.
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Support for this position rose to 89% among organisations answering the question. The consultation included 785 published responses from individuals, Local authorities and organisations. These included responses from:- • North Ayrshire Council • Arran Development Trust • 43 responses with a connection to North Ayrshire Within the consultation question 23 specifically focussed on the impact on island communities i.e. “Please tell us how you think the changes identified might affect island communities.” Around 615 respondents provided a comment at Question 23, with a frequently made point being that it will be important for island authorities and communities to determine how proposals are applied. While there was a view that island communities are likely to experience a similar range of impacts as are expected across other parts of Scotland, most of those commenting thought that islands are likely to be disproportionately affected – positively or negatively. This was linked to suggestions that second and empty homes account for a significantly larger proportion of the housing stock, and that short-term lets make a very significant economic contribution for some islands. The consultation included some Specific impacts identified for island communities: Respondents highlighted the extent to which the issues of housing, the economy and community are closely interconnected for Scotland’s islands. However, as is outlined
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below, views were very much divided on the likely balance between positive and negative impacts across these themes. Housing In terms of housing impacts for island communities, respondents were primarily focused on the potential for more second homes being made available for sale, and more empty homes being brought back into use. It was noted that these outcomes, if they increase supply of permanent accommodation, are consistent with the need to address depopulation and the sustainability of communities and economies across some of Scotland’s islands. Specifically, it was suggested that: • increased supply could help curb house price inflation • additional Council Tax income could be used to deliver additional affordable supply, including through the provision of funding to help with renovating empty homes However, it was also suggested that the extent of any positive housing impacts is likely to vary across island communities. In particular, the proposals were seen as unlikely to benefit communities where there is no significant housing shortage, or there is a lack of housing demand. It was also suggested that any positive impact will depend on how well additional housing supply matches local housing need. There was also a view that the anticipated positive housing impacts are unlikely to be realised across many island communities. There was reference to some of the issues noted above, such as lack of housing demand and a potential mismatch between supply and need, but also concerns that
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any empty or second homes becoming available to buy may be unaffordable for local residents. It is recognised that this is an issue on the isle of Arran. It was suggested that this may result in homes only being available to wealthy households. Equally, it was also noted that owners may simply choose to retain their second home or leave their property empty, including because of local market conditions. In the case of Cumbrae, house prices are in the more affordable range for local residents and for those who have purchased second homes. Housing demand and indeed supply are not regarded as a major issue, however, the type of properties available on the island do not necessarily match the required property type required to help grow the population. Local economy Views were mixed on whether the proposed changes would be likely to have a positive or negative impact on island economies. As at other questions, respondents noted that a localised approach will be required to support economic activity, and by extension sustainable communities. Expected positive economic impacts were primarily linked to the potential for improved access to housing for workers. A shortage of affordable housing was identified as a key barrier to recruitment for some island economies, and de-population was also highlighted as limiting economic growth for some islands. Both Arran and Cumbrae populations have declined by 10% since 2001. It was suggested that an increase in housing supply could help to retain the local labour force and make islands more attractive to workers moving from the mainland or further afield. However, there were also concerns about the loss of investment from second home buyers, linked to a view that this
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investment has been crucial in bringing empty or derelict homes back into use across many island communities. It was also suggested that loss of this investment could have an adverse impact on tourism activity if the appearance and amenity of communities are affected. There were also more general concerns that a decline in the visitor economy, as a result of a loss of holiday accommodation and increased accommodation costs, could have a very significant, if not devastating, impact on some island communities. This was linked to loss of employment in particular. In terms of why island communities might be particularly affected, especially by any higher occupancy threshold for short-term lets, it was reported that the tourist season can be shorter on many islands. Local communities Most of those commenting on community impacts anticipated that the proposals would be likely to have positive impacts. This was primarily associated with a reduction in second homes and short-term lets resulting in more year-round occupancy. It was suggested that this would support the sustainability of island communities, and again there was reference to limiting rural depopulation. However, it was also acknowledged that some second homes have been passed down the generations, with the current owners retaining a strong connection to, and actively supporting, the local community. Nevertheless, retaining or building the permanent population was seen as crucial to helping to sustain key local services, such as schools, healthcare and community facilities. Although it was thought that the proposals could have a positive impact on local communities, there were also concerns that they could
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have the opposite effect and could affectively undermine the sustainability of those communities. This linked back to concerns about the local economy if a substantial proportion of holiday accommodation is lost. Approach to implementation of changes for islands Respondents highlighted the importance of enabling a localised approach to implementation. In terms of the local needs and circumstances that may be relevant to implementation of changes across islands, these included the role of the visitor economy, local housing supply, and the sustainability of communities. It was also suggested that island communities might benefit from an understanding of the different reasons for short-term lets and second home ownership, for example for work or access to education, and as additional income for island residents. As at Question 5 in relation to Council Tax premiums, there was reference to the importance of an evidence-based approach and to ensuring that local communities are involved in any decisions. Linked to calls for a localised approach, respondents wished to ensure that additional funds raised through proposals are retained to benefit island communities. There was specific reference to using funds to support bringing empty homes back into use, to provide advice to owners on compliance with current building standards, for support with potential barriers to becoming a private landlord, and to promote options to sell at locally affordable levels. It was also suggested that additional funding may be required for island communities where they have chosen to limit the application of changes, and thus to
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reduce any additional income, in order to support the sustainability of local communities and economies. Modelling and ongoing assessment of impact was also seen as essential to better understand how proposals are affecting Scotland’s diverse island communities. This was highlighted specifically in relation to monitoring of housing impacts, and the balance between economic and community impacts. The Arran Development Trust (ADT) also submitted a response to the Scottish Government consultation. It is a community membership organisation, free to join and open to all residents on Arran and includes 404 members. It’s purpose is to directly and indirectly increase the supply of affordable housing on Arran. ADT Summary response to the Consultation: 1) Over the rate of council tax: ADT agrees that councils should be granted: a) More discretion over the rates of council tax on second homes by, introducing additional powers that enable a premium of up to 100% b) Introducing additional powers that enable premiums of greater than 100% to be applied to both second ( and long -term empty) homes. c) Properties offering Long Term Let should be exempt.
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d) Implementation range: From the council to individual wards. Reason and evidence in support of ADT response: The Arran economy is heavily dependent upon tourism. Second homes, offering visitor accommodation, is the biggest source of visitor accommodation. The Arran economy also needs people to support community services and the wider economy. Even with a reliable ferry service, we require people to live and work in our shift based, seven-day economy. The current lack of affordable accommodation, threatens the provision of community services and the business economy. Most importantly, working age population decline threatens the viability of the Island. Arran has the highest proportion of Second and Empty Homes (26%) of any Ward in Scotland. Individual Villages can be as high as 47% Second and Empty Homes. The Arran Development Trust appreciates the competing demands of business, community and public services. The objective is to create a demand/supply balance in affordable housing. This will be achieved by: a) Build more affordable homes. b) Encourage empty and second homes into long term rent or purchase market. The Government’s “case for change”, if implemented properly, can help achieve both.
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Visitors come to Arran to “own” a piece of the Island for the duration of their stay. They do not want to negatively impact what they have come to love. Increasing publicity on the impact of second homes on local populations will not be sitting well with them. Good communication around these proposals could show how Visitors are helping to solve an Island problem. It is important for Island residents to see this also to prevent a ground swell of resentment that impacts the Visitor experience. Implementation: Implemented properly from an Arran perspective, means achieving a balance between the visitor economy and the needs of the community and workforce for accommodation. This can be achieved by implementing the following: a) Income from Second and Empty Homes should spent in the locality they are raised, assuming there is a need. For example, Arran is 3% of NAC population but 40% of NAC second homes. The creation of a “locality” based ( e.g. Arran Ward) Affordable Housing Fund is essential in achieving the objectives outlined above. b) Properties offering Long Term Lets would be exempt from increases and councils should be able to give a discount. c) A local and national communication programme showing how Second and Empty Homeowners are contributing to solving the Island problem. d) It is essential that that the Scottish Assessors have sufficient staff to ensure the rules on Self Catering Accommodation and the Small Business Bonus Scheme
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are being properly implemented. Some of the increased funds from Council Tax should go to support this. Failure to do this will see a mass transfer of Second Homes to Business Rates, claiming the Small Business Bonus and pay no tax. Is your consultation robust and meaningful and sufficient to comply with the Section 7 duty? The North Ayrshire Council Consultation undertaken between 10 October 2024 to 25 November 2024 has been determined by officers as robust and meaningful and sufficient to comply with the Section 7 duty. STEP FOUR - ASSESSMENT Does your assessment identify any unique impacts on island communities? Each island has its own characteristics and challenges. Both island economies rely heavily on a reliable ferry service. In the case of Arran, due to the travel times and frequency of service the impacts of any disruption are more acute. The proposed change to apply a 100% premium on council tax for second homes will likely have an impact on the property ownership models across both islands, however, the extent of change will initially be influenced by the personal economic circumstances of each second homeowner. The policy intent behind the application of a premium is to influence home ownership models across all second homes that helps increase the level of housing provision available for more permanent housing or more occupancy. Does your assessment identify any potential barriers or wider impacts? Analysis of the available information, including the responses to the consultation carried out by the Council, highlights a number of potential barriers or wider impacts of the proposal. In the case of Arran, similar to Cumbrae the island economy is reliant on tourism. The most significant factor affecting the island economy continues to be the reliance on the ferry service, where delays and cancellations have a serious impact on both
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the resilience and economy of the island. Like Cumbrae, the primary consideration for current second homeowners that could influence the level of any behavioural shift in property ownership from the impact of the council tax premium, would initially be influenced by the economic circumstances of the homeowner. The council tax Band profile on Arran includes 348 of the 572 (61%) second home properties being Band D or above. This is a different profile to that of Cumbrae. It could therefore be assumed that the income decile of the second homeowners on Arran is generally greater than those on Cumbrae. This may limit the level of behavioural shift in property ownership model through the application of the council tax premium, however, it is also recognised that the higher the Band of the property the greater the level of any council tax premium e.g. Based on 2024/25 levels Band D would be an annual council tax premium of £1,452 and Band E £1,908. It is also appreciated that a number of second home properties will be generational properties passed down to family members. It is anticipated that the impact of the council tax second home premium will cause a level of behavioural shift in property ownership models. The main challenge on Arran is not so much the lack of available housing, as any current analysis of property availability on the Island shows, however, there is an acute problem with the lack of affordable housing, where house prices are such that living on the island, especially for those people who deliver key services on the island, find it unaffordable. It is recognised that the application of a second home council tax premium may not address this issue in the short term, as a number of respondents highlighted that most of the second homes on Arran are unlikely to be affordable if put on the market. However, it should also be considered that any behavioural shift that leads to more housing supply in the
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market through sale could have a positive impact on bringing house prices down on the island. Similar to Cumbrae it is also anticipated that some second homeowners may choose to switch their property to a holiday let. Again, through this shift and based on an assumed increase in level of overall home occupancy, this could have a net positive economic impact to the island economy where one in three jobs on the island is tourism related. The consultation response also included feedback that those with second homes were more likely to spend more money on the island when they were there than permanent residents would spend. To address this point, it is recognised that the threshold for second home classification is aligned to an occupancy period of at least 25 days per year. It is therefore considered that, on balance, the economic benefits of higher levels of occupancy throughout the year are expected to outweigh the economic benefits of increased levels of spending over shorter periods of time. How will you address these? The impact of the policy will be monitored to assess the ongoing impact and extent of behavioural shift in property ownership models on the islands. This will include the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. With external support, house prices on the islands will also be monitored. The proposed policy includes a further top-slice of funding to support investment in affordable housing for North Ayrshire. The 10% allocation from the proposed 100% council tax premium builds on an initial 40% from the current level of second home council tax. This means that 25% of the total
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proposed charge for council tax on second homes will be invested in affordable housing across North Ayrshire. You must now determine whether in your opinion your policy, strategy or service is likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities). Yes - due to the relatively high proportion of second home ownership in Arran it is considered that the policy is likely to have an effect on this island community which is significantly different from its effect on other communities. It is anticipated that the effect of the policy on Arran would likely differ to the effect on Cumbrae due to the different profile of the council tax banding of second homes on each island. This may mean that there is less behavioural change in Arran compared to Cumbrae as the owners of properties on Arran may be less affected by the introduction of a premium which may mean they are less motivated to sell their properties or convert them to holiday lets. Conversely, the effect of doubling the Council Tax on a higher banded property compared to a lower banded property may mean that some owners on Arran are more likely to seek to mitigate the financial impact of the policy. The extent of any differential impact however will depend on the personal and financial circumstances of each second homeowner and is therefore difficult to predict accurately. If the answer is YES, an ICIA must be prepared and you should proceed to Step Five STEP FIVE – PREPARING YOUR ICIA Assess the extent to which you consider that the policy, strategy or service can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. This policy change would be applied across the whole of North Ayrshire and affect those individuals who currently own a second home. Currently all second homeowners pay full council tax on their second home and this change would result in a 100% premium being applied, therefore, resulting in a
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200% council tax charge. These charges will vary depending on the council tax Band of the property, ranging from an annual premium of £968 for a Band A property to £3,558 for a Band H property. The main policy intent behind this change is ultimately to influence a behavioural change in current ownership models that would then result in more permanent home occupancy or a greater level of home occupancy from the current minimum of 25 days per annum related to second home ownership. This is in line with the priority of tackling depopulation which is reflected in the Arran Local Island plan. To the extent that the policy change may lead to more second homes being put up for sale in Arran which may in turn lead to a reduction in property prices, this policy change may also contribute to the key priorities of affordable housing and attracting labour. The proposed policy includes a further top-slice of any revenue generated to support investment in affordable housing. In total, 25% of all council tax revenue generated from second homes in North Ayrshire would be directed towards investment in affordable homes. Any investment would continue to be needs based and in accordance with North Ayrshire’s Local Housing Strategy (LHS) 2023 – 2028 approved at Cabinet on 13 June 2023. It is important to note that the LHS includes the work of the Arran Housing Task Force which involves a wide range of partners to address the issues which face island residents and businesses. The task force aims to assess the demand for affordable housing on Arran and identify issues that may be limiting economic sustainability and growth. Working in partnership with the Scottish Government, local community groups and Registered Social Landlords who operate on the island, the task force is the recognised body that works collaboratively on issues relating to housing on Arran.
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It should also be recognised that separate to the current number of second homes across both islands there are also properties designated as holiday lets, totalling over 300 in Arran (and around 60 in Cumbrae), providing tourist accommodation to support this sector. The consultation responses included reference to a number of mitigation measures from respondents e.g. suggestion of a sliding scale of premium charge depending on property type. To address this point, it is considered that the current council tax banding allocated to properties is in effect a built-in sliding scale that aligns to historic property valuations. Further, responses included requests that additional revenue generated by the scheme should be ring-fenced for spending on the island that generated the income. To address this point, within the context of the challenging fiscal environment that councils are operating in it is recognised that this revenue will help protect vital council services, however, it is also important to note that the proposals include a 10% top-slice of funding to support investment in affordable housing. This being based on need and in accordance with the North Ayrshire Council Local Housing strategy. Any unintended consequences of the policy will be closely monitored so that appropriate steps can be taken to minimise any negative outcomes for the community as required. Consider alternative delivery mechanisms and whether further consultation is required. Due to the complex and changing nature of people’s individual circumstances and ultimately the choices they make, it is difficult to predict the level of housing ownership shift across both islands that may result as a consequence of the application of a 100% council tax premium on second homes,
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or indeed the level of any unintended consequences of this policy. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. Extensive feedback from the Consultation has been gathered and is included in appendix 1 of the report. From the 398 respondents to the survey on proposals relating to Taxes and Levies, 44 (11.06%) related to Arran and 70 (17.59%) related to the North Coast and Cumbrae. From the 507 respondents to the more targeted survey, 247 (49%) related to Arran and 155 (31%) related to the North Coast and Cumbrae. Feedback was also provided by the following Engagement Groups: Redburn Grove Tenants Group; 3Towns Community Shed; Healing Hearts Group; Scottish Syrian Roses; Long Covid Group; Kilbirnie Residents – Syrian & Ukrainian New Scots Women; Big ESOL class, Syrian, Afghan learners; Garnock Community Campus Umbrella Club; Newton Mens Shed; Online Consultation – Ukrainian; and NAFCO. Of the respondents to the Taxes and Levies survey, 114 (30.56%) respondents indicated that the proposal would have a high impact on them or their community; 105 (28.15%) indicated that the proposal would have no impact on them or their community; 80 (21.45%) indicated that the proposal would have a low impact on them or their community, and 74
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(19.84%) were unsure how much impact the proposal would have on them or their community. Of the respondents to the more targeted survey on the proposal, 299 (59%) respondents indicated that the Council should not apply a premium on council tax. However, to provide further context, 209 (41%) respondents identified as being a current second home owner. A range of views were expressed in response to both surveys including reference to:- • Impact of the local economy and tourism received mixed views • The fairness of any charge, again received mixed opinions • The need for affordable housing on Arran was stressed and the difficulties for people to stay on the island due to house prices • Around 146 current second homeowners who responded to the more targeted survey indicated they would sell their property if the premium was introduced and 75 owners indicated they would pay the premium, keep their property and continue to use it as a second home. Given the level of feedback from the recent programme of engagement , further consultation is not considered necessary at this time, however it is important that, should this policy be implemented, any impacts are monitored within the context of both island economies. This will include monitoring the number
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of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. With external support, house prices on the islands will also be monitored. Describe how these alternative delivery mechanisms will improve or mitigate outcomes for island communities. Any further required mitigations will continue to be assessed on an ongoing basis. Identify resources required to improve or mitigate outcomes for island communities. As above. STEP SIX – MAKING ADJUSTMENTS TO YOUR WORK Should delivery mechanisms/mitigations vary in different communities? This policy change would be applied across the whole of North Ayrshire, including both islands and the mainland. Whilst it is recognised that both islands have a high proportion of second homes and each island has its own characteristics and challenges this assessment has been completed based on the policy being applied across the whole area. Any behavioural change will be influenced by the economic circumstances of the current second homeowner. Given the high proportion of second home ownership in both island communities it is considered essential for the realisation of the policy objectives that the policy applies to the islands in the same way that it applied to the mainland. The inclusion of a proposed further 10% top-slice of funding to support investment in affordable housing would be used in accordance with North Ayrshire’s Local Housing Strategy, including the work of the Arran Housing Task Force which involves a wide range of partners to address the issues which face island residents and businesses. It is currently anticipated that the impact of this policy would be positive for the island by increasing the level of home occupancy and prioritising homes for living in on a more
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permanent basis. In the event of any unintended consequences of this policy being identified in the course of ongoing monitoring, including but not limited to the potential barriers or wider impacts identified at step 4 above, consideration will be given to appropriate steps which may be required to mitigate these across different communities as required. Do you need to consult with island communities in respect of mechanisms or mitigations? Island communities have provided feedback to the on-line survey delivered as part of the Council’s Budget engagement programme. From the 507 total respondents to the targeted survey on this proposal, 247 (49%) were from Arran and 155 (31%) from the Isle of Cumbrae. In the event of any unintended consequences of this policy being identified in the course of ongoing monitoring, consideration will be given to appropriate steps which may be required to mitigate these across different communities as required, including whether further consultation is required. Have island circumstances been factored into the evaluation process? The particular circumstances in Arran have factored into the evaluation process as set out above. Have any island-specific indicators/targets been identified that require monitoring? In December 2019, Scottish Ministers published the first ever National Islands Plan, which was created with the input from many islanders, including those on Arran and Cumbrae. The current Plan sets out 13 Strategic Objectives which are practical yet critical to improving the quality of life for island communities. The 13 strategic objectives (SOs) set out in the National Islands Plan include:- • To address population decline and ensure a healthy, balanced population profile • To improve and promote sustainable economic development • To improve transport services • To improve housing
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• To reduce levels of fuel poverty • To improve digital connectivity • To improve and promote health, social care and wellbeing • To improve and promote environmental wellbeing and deal with biosecurity • To contribute to climate change mitigation and adaptation and promote clean, affordable and secure energy • To empower diverse communities and different places • To support arts, culture and language • To promote and improve education for all throughout life • To support effective implementation of the National Islands Plan It is recognised that a number of the national strategic objectives included above could be impacted either directly or indirectly through this new policy initiative i.e. through these measures that results in more home occupancy and more permanent housing availability and affordability. The behavioural shift could help address affordable housing need through an increase in housing supply and help grow the island population and provide more accommodation for staff to deliver vital public services. It is within the above context that, following any new policy implementation, through monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets, along with external support to help monitor house prices on the islands, it is anticipated this will provide a sufficient level of information to assess the ongoing impact of the policy.
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How will outcomes be measured on the islands? Monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets, along with external support to help monitor house prices on the islands, it is anticipated this will provide a sufficient level of information to assess the ongoing impact of the policy and any associated outcomes. How has the policy, strategy or service affected island communities? This would be monitored on an ongoing basis. How will lessons learned in this ICIA inform future policy making and service delivery? This would be assessed on an ongoing basis as the policy was implemented. STEP SEVEN – PUBLISHING YOUR ICIA Have you presented your ICIA in an Easy Read format? Does it need to be presented in Gaelic or any other language? This is not considered proportionate for the Island or wider North Ayrshire community Where will you publish your ICIA and will relevant stakeholders be able to easily access it? The completed ICIA will be included in a report to North Ayrshire Council scheduled for 12 February 2025, therefore, the information will be publicly available. Who will sign-off your final ICIA and why? ICIA approved by: ……………Mark Boyd……………………………………………………………… Position: ……………Head of Finance……………………………………………………………… Signature: …… ……………………………………………………………………… Date completed: ……………28/01/2025………………………………………………………………
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APPENDIX 2 - ISLAND COMMUNITIES IMPACT ASSESSMENT ISLE OF CUMBRAE Please ensure this template is completed in conjunction with the Island Communities Impact Assessment (ICIA) Guidance on the Scot Gov Website Name of Policy, Strategy or Service Council Tax Premium applied to Second Homes STEP ONE – DEVELOP A CLEAR UNDERSTANDING OF YOUR OBJECTIVES What are the objectives of the policy, strategy or service? The policy objective is to make the council tax system work as an incentive to prioritise homes for living in on a more permanent basis and increasing the level of home occupancy. By applying a 100% premium on council tax for second homes, which would bring this in line with the position across long-term empty properties for North Ayrshire, it is anticipated this would influence behavioural changes across current second home ownership in Scotland and in North Ayrshire to bring more housing into use to support greater occupancy and it is also recognised that the behavioural shift could also lead to more holiday let properties. This would be through a modal shift from second home occupancy of at least 25 days per annum to more permanent levels of occupancy through sale or rental, and in the case of holiday lets, a potentially greater level of occupancy throughout the year against the measurement of the property being available for rent for 140 days per year and actually let for at least 70 days per year. Both shifts could also have wider economic benefits to the local economy. It is also recognised that the application of this policy could also generate additional revenue for the Council. This is against a backdrop of significant budget challenges for all Councils. The
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use of such statutory powers would help mitigate the impact of budget gaps and help protect vital Council services. Do you need to consult? The North Ayrshire Council meeting of 14 February 2024 agreed that a programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. How are islands identified for the purpose of the policy, strategy or service? This policy would apply across all of North Ayrshire. The Isles of Arran and Cumbrae have therefore been identified as being affected by this policy. A separate ICIA has been completed in respect of the Isle of Arran. What are the intended impacts / outcomes and how do these potentially differ in the islands? The isles of Cumbrae and Arran have a high proportion of second homes. In North Ayrshire there are 1,476 domiciles classed as second homes i.e. a home not a primary home and occupied for at least 25 days per year. 30% of North Ayrshire second homes are on Cumbrae (450), 39% are on Arran (572), with the North Ayrshire mainland having 454 second homes (31%). It is proposed that this policy would be applied across all of North Ayrshire. It is recognised that both islands have a high proportion of second homes when compared to the mainland, therefore the impact of this policy could be proportionally greater across the Island communities than that of the mainland. It is also recognised that both island communities are
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different. The Council tax Band profile of second homes on Cumbrae is such that 344 properties out of the 450 second home properties (76%) are either Band A or Band B. In Arran, only 118 properties from the 572 second homes (21%) sit across Band A or Band B. The property profile on Cumbrae reflects a higher number of smaller tenemental properties, whereas Arran has a greater proportion of larger dwellings which are also impacted by higher house prices, driven by demand on the Island. The considered impact of the policy is that both Islands could benefit from increased levels of home occupancy when compared to the current level of occupancy through the second home ownership model. An increase in the level of home occupancy through a behavioural change, whether it be through sale or rent of the properties or through a switch to a holiday let, could have a net economic benefit to both island economies. In terms of addressing general housing availability and need, again there are distinct differences across both islands i.e. in Cumbrae it is recognised that the type of second home accommodation proportionally across Bands A and B may not lend itself or be suitable for more permanent island living. Whereas in Arran there are significant challenges around the availability of affordable housing. This ICIA is concerned with the impact on the Isle of Cumbrae. Is the policy, strategy or service new? Yes, the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 was introduced by the Scottish Government following consultation and came into force on 1 April 2024, giving Councils the power to vary the Council Tax charge for second homes from the current 100% charge to include a premium of up to a further 100% of the applicable Council Tax charge.
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STEP TWO – GATHER YOUR DATA AND IDENTIFY YOUR STAKEHOLDERS What data is available about the current situation in the islands? • The Scottish Government’s consultation responses and report • Internal analysis of second homes profile across the island community and council tax bands • The Isle of Cumbrae Local Island Plan • Isle of Cumbrae Economic Baseline report Do you need to consult? Yes. The North Ayrshire Council meeting of 14 February 2024 agreed that a programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. How does any existing data differ between islands? Both islands have a high concentration of second home ownership when compared with the mainland. Around 25% of privately owned homes on Arran are second homes compared with over 40% on the Isle of Cumbrae. In terms of the North Ayrshire mainland less than 1% of homes are second homes. The council tax banding profile across each island is also markedly different i.e. Cumbrae has a very high concentration of Band A properties whereas Arran’s highest concentration is across Band’s D and E. This is set out below:-
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Band Arran Cumbrae Mainland Total A 57 272 97 426 B 61 72 71 204 C 106 61 67 234 D 124 22 76 222 E 147 21 81 249 F 65 1 43 109 G 12 1 17 30 H 0 0 2 2 Total 572 450 454 1,476 The Isle of Arran is the seventh largest Scottish island and is the largest island in the Firth of Clyde with an area of 432 square miles. It is the most southerly populated of the Scottish islands with Brodick, Lamlash and Whiting Bay on the east coast of the island being the main settlements. Arran is reliant upon its ferry services to transport residents and visitors to and from the island and to access medical and social services, to visit family and friends and for leisure purposes. The Fraser of Allander Institute report ‘The Impact of Covid 19 on the Arran Economy’ estimated that, on average, each day, the ferries contribute just under £170,000 to the island’s economy. This demonstrates the social and economic lifeline that the ferry provides to the island communities and businesses. In 2023, the total population of Arran was estimated to be 4,549. This represents a 12% decline in the total population of Arran since 2003. 54% (2,441) of the population is of working
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age. 7% of the population is aged 16-24, with 48% aged 24-64 and 34% aged 65 and over. It is estimated that, for 2022, the GVA (Gross Value Add) for Arran was £93.24 mil. The top sector was ‘Manufacturing’, which had a GVA of £26.67 mil. All but one of Arran’s data zones rank above the median (average) for the overall domain2 ranking. The access to services domain has some of the lowest domain ranks for Arran’s data zones, with five out of seven data zones ranking below the median, and two of those among the bottom 10%. The housing domain also highlights some key challenges on Arran, with six out of the seven data zones ranking below the median. Access to affordable housing is a key challenge for the Island. As of 2022, tourism related employment accounted for roughly one in three jobs in Arran. Key employing sectors on Arran are: ‘Accommodation and food service activities’ (30%), ‘Wholesale and retail trade; repair of motor vehicles and motorcycles’ (13%), and ‘Transportation and storage’ (10%). ‘Education’ and ‘Human health and social work activities’ are also important sectors, accounting for 9% and 6% of overall employment respectively. As of December 2023, Arran’s claimant count (estimate of people claiming unemployment related benefits) as a proportion of the working age is 2.8%. This is below the national (Scotland) average of 3.0%.
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The key priorities reflected in the Arran Local Island plan include:- • A reliable ferry service • Affordable housing • Health and Social care services • Early years provision on the island • Attracting labour • Tackling depopulation • Public transport on the island The Isle of Cumbrae is Scotland’s most accessible populated island and as such the island represents an important and unique island economy in North Ayrshire. Millport is the only settlement on Cumbrae. The island has an active and engaged community with a wide range of interest groups represented in the many clubs and associations on the island. The island has a reputation as an attractive visitor destination and is famously popular among cyclists of all ages thanks to a safe 10-mile, mostly flat, circular loop around the island. It is estimated that, for 2022, the GVA (Gross Value Add) for Cumbrae was £13.85 mil. The top sector was ‘Human health and social work activities’, which had a GVA of £4.66 mil. As of 2022, total employment on the Isle of Cumbrae was estimated at 425. The top three industries in terms of numbers employed are ‘Human health and social work activities’ (28%), ‘Arts, entertainment and recreation’ (24%), and ‘Accommodation and food service activities’ (16%).
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The claimant count (estimate of people claiming unemployment related benefits) as a proportion of the working age population for the Isle of Cumbrae was 5.7% as of December 2023. This is almost double the Scottish average of 3.0%. Further to this, in mid-2022, North Ayrshire Council prepared economic baseline report, which was an update to the October 2021 Economic Baseline. This report reviewed the available economic data for the Isle of Cumbrae to inform the development of a Cumbrae Local Island Plan. The key findings included:- Despite its unique strengths, the Isle of Cumbrae faces significant demographic challenges. Over the period of 2001 to 2020, the estimated total population of the Isle of Cumbrae has contracted by 12% – from 1,431 in 2001 to 1,262 in 2020. For the Isle of Cumbrae, the percentage share of the total population that is of working age is 11-percentage points lower than the Scottish level (53% compared to 64%), and the percentage share of the population that is aged 65+ is over double the Scottish rate (39% compared to 19%). To realise Cumbrae’s vision of becoming a sustainable and accessible island, three plan themes determine the Island Plan with a set of key priorities and related actions that build on the existing strengths of the island and minimise risk and further fragility to the community, economy and environmental wellbeing of Cumbrae. In the Communities theme the key priorities include:-
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• Reliable ferry provision • Affordable and Social Housing • Population – Attract working age families • Public transport and infrastructure • Access to health and social services • Effective community governance • Community Facilities The economy theme key priorities include: • Improving resilience of island business base • Diversification of economy and reliance on seasonal tourism • Improved tourism and retail offer • Education and skills and retention of young people • Recruitment and retention of employees • Employment opportunities Finally, the environment theme key priorities include: • Addressing energy costs • Climate action and sustainability • Protection of natural environment • Built and natural environment • Tourism management • Public transport and infrastructure • Flood prevention and marine / pier infrastructure Are there any existing design features or mitigations in place? Each island has specific challenges, and they are reflected in the key priorities across each island. If you consider the current number of second homes across each island and how any
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behavioural shift could impact on the key priorities for each then it is recognised that a shift in housing models, through the application of a council tax second home premium, which leads to more home occupancy or permanent levels of occupancy, to support the island economy and help provide accommodation for those individuals who deliver key services across the islands, could have a net positive impact across a range of priority areas across both islands. They include:- • Health and Social care services (for staff accommodation) • Early years provision on the island (for staff accommodation) • Attracting labour (through more housing availability) • Tackling depopulation (through more housing availability) • Public transport on the island (through staff accommodation) • Affordable housing • Recruitment and retention of employees Any modal shift in housing ownership models must consider the impact on tourism on the islands. This is a vital element of the island economy across both islands. For clarity, this proposed application of a council tax premium for second homes relates to properties which are not the primary residence and are occupied for a period of at least 25 days a year. For comparison, properties which are made available for holiday lets for at least 140 days per year and are actually let for a period of at least 70 days per year, are not subject to council tax, rather they are subject to non-domestic rates. This cohort of properties will not be affected by this change,
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however, it is recognised that following the application of a council tax premium for second homes, it is anticipated that some current second home owners may then apply to be assessed for non-domestic rates purposes, subject to meeting the qualifying criteria. In such an event, this modal shift, whilst not directly contributing to the delivery of a greater level of permanent housing occupancy, would still likely have a net economic benefit to the island economy through a greater level of tourist accommodation provision. This will also have an impact on the level of revenue generated through council tax to the council. STEP THREE – CONSULTATION Who do you need to consult with? The Scottish Government ran a joint consultation with COSLA from 17 April to 11 July 2023 to seek views on the proposals to provide additional powers to councils allowing them discretion to: • Charge up to 100% premium (double the full rate) on council tax for second homes • Charge more than 100% premium on council tax for second homes and long-term empty homes There were 981 responses to the Scottish Government consultation: 73 from groups and 908 from individual members of the public. The consultation report is available online. The North Ayrshire Council meeting of 14 February 2024 agreed that a local programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions.
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A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey as part of the Council’s Budget Engagement programme. The consultation was open to all North Ayrshire residents, including island residents, business owners and current second homeowners. In addition, there was a more targeted on-line survey relating specifically to the proposal to implement an additional Council Tax levy on second homes which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. How will you carry out your consultation and in what timescales? The Scottish Government consultation opened on 17 April 2023 and closed on 11 July 2023. A North Ayrshire Council programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey as part of the Council’s Budget Engagement programme. The consultation was open to all North Ayrshire residents, including island residents, business owners and current second homeowners. In addition, there was a more targeted on-line survey relating specifically to the proposal to implement an additional Council Tax levy on second homes which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. What questions will you ask when considering how to address island realities? The Scottish Government consultation, which opened on 17 April 2023 and closed on 11 July 2023, asked 25 questions. Full details of the Consultation and responses is available here on the Scottish Government’s website.
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With reference to the consultation undertaken between 10 October 2024 and 25 November 2024, full details of consultation responses are included in appendix 1 of the report. What information has already been gathered through consultations and what concerns have been raised previously by island communities? The Scottish Government consultation was open to all citizens and also included specific reference to Island communities. Of those answering the question, 55% of respondents thought that councils should be able to charge a Council Tax premium on top of regular Council Tax rates for these second homes. Support for this position rose to 89% among organisations answering the question. The consultation included 785 published responses from individuals, Local authorities and organisations. These included responses from:- • North Ayrshire Council (Included in appendix 1 of the Scottish Government Consultation report) • 43 responses with a connection to North Ayrshire Within the consultation question 23 specifically focussed on the impact on island communities i.e. “Please tell us how you think the changes identified might affect island communities.” Around 615 respondents provided a comment at Question 23, with a frequently made point being that it will be important for island authorities and communities to determine how proposals are applied. While there was a view that island communities are likely to experience a similar range of impacts as are expected across other parts of Scotland, most of those commenting thought that islands are likely to be disproportionately affected – positively or negatively. This was linked to suggestions that second and empty homes account for a significantly larger proportion of the housing stock, and
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that short-term lets make a very significant economic contribution for some islands. The consultation included some Specific impacts identified for island communities: Respondents highlighted the extent to which the issues of housing, the economy and community are closely interconnected for Scotland’s islands. However, as is outlined below, views were very much divided on the likely balance between positive and negative impacts across these themes. Housing In terms of housing impacts for island communities, respondents were primarily focused on the potential for more second homes being made available for sale, and more empty homes being brought back into use. It was noted that these outcomes, if they increase supply of permanent accommodation, are consistent with the need to address depopulation and the sustainability of communities and economies across some of Scotland’s islands. Specifically, it was suggested that: • increased supply could help curb house price inflation • additional Council Tax income could be used to deliver additional affordable supply, including through the provision of funding to help with renovating empty homes However, it was also suggested that the extent of any positive housing impacts is likely to vary across island communities. In particular, the proposals were seen as unlikely to benefit communities where there is no significant housing shortage, or
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there is a lack of housing demand. It was also suggested that any positive impact will depend on how well additional housing supply matches local housing need. There was also a view that the anticipated positive housing impacts are unlikely to be realised across many island communities. There was reference to some of the issues noted above, such as lack of housing demand and a potential mismatch between supply and need, but also concerns that any empty or second homes becoming available to buy may be unaffordable for local residents. It is recognised that this is an issue on the isle of Arran. It was suggested that this may result in homes only being available to wealthy households. Equally, it was also noted that owners may simply choose to retain their second home or leave their property empty, including because of local market conditions. In the case of Cumbrae, house prices are in the more affordable range for local residents and for those who have purchased second homes. Housing demand and indeed supply are not regarded as a major issue, however, the type of properties available on the island do not necessarily match the required property type required to help grow the population. Local economy Views were mixed on whether the proposed changes would be likely to have a positive or negative impact on island economies. As at other questions, respondents noted that a localised approach will be required to support economic activity, and by extension sustainable communities. Expected positive economic impacts were primarily linked to the potential for improved access to housing for workers. A shortage of affordable housing was identified as a key barrier to recruitment for some island economies, and de-population was
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also highlighted as limiting economic growth for some islands. Both Arran and Cumbrae populations have declined by 10% since 2001. It was suggested that an increase in housing supply could help to retain the local labour force and make islands more attractive to workers moving from the mainland or further afield. However, there were also concerns about the loss of investment from second home buyers, linked to a view that this investment has been crucial in bringing empty or derelict homes back into use across many island communities. It was also suggested that loss of this investment could have an adverse impact on tourism activity if the appearance and amenity of communities are affected. There were also more general concerns that a decline in the visitor economy, as a result of a loss of holiday accommodation and increased accommodation costs, could have a very significant, if not devastating, impact on some island communities. This was linked to loss of employment in particular. In terms of why island communities might be particularly affected, especially by any higher occupancy threshold for short-term lets, it was reported that the tourist season can be shorter on many islands. Local communities Most of those commenting on community impacts anticipated that the proposals would be likely to have positive impacts. This was primarily associated with a reduction in second homes and short-term lets resulting in more year-round occupancy. It was suggested that this would support the sustainability of island communities, and again there was reference to limiting rural depopulation. However, it was also acknowledged that some second homes have been passed down the generations, with
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the current owners retaining a strong connection to, and actively supporting, the local community. Nevertheless, retaining or building the permanent population was seen as crucial to helping to sustain key local services, such as schools, healthcare and community facilities. Although it was thought that the proposals could have a positive impact on local communities, there were also concerns that they could have the opposite effect and could effectively undermine the sustainability of those communities. This linked back to concerns about the local economy if a substantial proportion of holiday accommodation is lost. Approach to implementation of changes for islands Respondents highlighted the importance of enabling a localised approach to implementation. In terms of the local needs and circumstances that may be relevant to implementation of changes across islands, these included the role of the visitor economy, local housing supply, and the sustainability of communities. It was also suggested that island communities might benefit from an understanding of the different reasons for short-term lets and second home ownership, for example for work or access to education, and as additional income for island residents. As at Question 5 in relation to Council Tax premiums, there was reference to the importance of an evidence-based approach and to ensuring that local communities are involved in any decisions. Linked to calls for a localised approach, respondents wished to ensure that additional funds raised through proposals are retained to benefit island communities. There was specific reference to using funds to support bringing empty homes back
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into use, to provide advice to owners on compliance with current building standards, for support with potential barriers to becoming a private landlord, and to promote options to sell at locally affordable levels. It was also suggested that additional funding may be required for island communities where they have chosen to limit the application of changes, and thus to reduce any additional income, in order to support the sustainability of local communities and economies. Modelling and ongoing assessment of impact was also seen as essential to better understand how proposals are affecting Scotland’s diverse island communities. This was highlighted specifically in relation to monitoring of housing impacts, and the balance between economic and community impacts. Is your consultation robust and meaningful and sufficient to comply with the Section 7 duty? The North Ayrshire Council Consultation undertaken between 10 October 2024 to 25 November 2024 has been determined by officers as robust and meaningful and sufficient to comply with the Section 7 duty. STEP FOUR - ASSESSMENT Does your assessment identify any unique impacts on island communities? Each island has its own characteristics and challenges. Both island economies rely heavily on a reliable ferry service. In the case of Cumbrae, due to the travel times and frequency of service the impacts of any disruption are less acute than they are on Arran. The proposed change to apply a 100% premium on council tax for second homes will likely have an impact on the property ownership models across both islands, however, the extent of change will initially be influenced by the personal economic circumstances of each second homeowner. The policy intent behind the application of a premium is to influence home ownership models across all second homes that helps
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increase the level of housing provision available for more permanent housing or more occupancy. Does your assessment identify any potential barriers or wider impacts? Analysis of the available information, including the responses to the consultation carried out by the Council, highlights a number of potential barriers or wider impacts of the proposal. In the case of Cumbrae a large proportion of second homes (76%) fall within Band A and Band B. These are smaller properties which include tenemental type properties. The local economy currently benefits from weekend occupancy and the holiday season including significant numbers of day-trippers, so is therefore dependent on the tourism with around a quarter of the resident population working in tourism related sectors. Without knowing the individual economic circumstances of current second homeowners on the island it is likely that due to the high proportion of Band A and Band B property types, the financial impact of the application of a council tax premium on current second home owners is likely to be proportionally higher than could be the case in Arran, recognising however the premium element of council tax is lower for lower banded properties. For context, the premium would result in an additional annual cost of £968 for a Band A, £1,129 for a Band B and rising to £3,558 for a Band H. It is therefore possible that this could drive a higher level of behavioural change through current properties being placed on the market for sale or made available for rent. In such cases if the property is then purchased or rented by an individual being their primary residence, then this would lead to higher levels of occupancy throughout the year and it would be anticipated, deliver a greater level of economic benefit to the island. There is a risk however, highlighted in a number of consultation responses, that due to the property types, especially across Bands A and
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B, that demand for purchasing or renting such property types with the intention of more permanent occupancy, may be limited due to the size and suitability of the property. Potential purchasers may be more aligned to second home buyers, therefore, there is a potential that a premium on council tax may not be attractive to all demographics and lead to larger numbers of properties being placed on the market for longer periods of time if supply exceeds demand. Again, this would very much be influenced by the economic circumstances of the buyer. Again, the extent to which this could impact the island economy is difficult to predict across the year as Cumbrae, due to the short travel time of the ferry, would continue to benefit from seasonal day-trippers and short stay tourists. Another possible scenario for current second homeowners on Cumbrae through the impact of the council tax premium, is for owners to consider going through the process of changing their property to a holiday let. This would be considered by the Ayrshire Valuation Joint Board subject to meeting the criteria of the property being available to let for a period of 140 days per year and actually let for at least 70 days per year. The property would therefore no longer be subject to council tax and move to non-domestic rates instead. Whilst it is recognised that this could be of economic benefit to the homeowner, as they would likely qualify for 100% Small Business Bonus Scheme relief, therefore not subject to any annual charge along with any rental income that they would also accrue, this would require the homeowner to make their home available to rent for a period of 140 days which may not be desirable. From an island economic impact perspective this switch in property model could still produce a net economic benefit due to the potential higher level of occupancy on the island throughout the year. The consultation response also included feedback that those
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with second homes were more likely to spend more money on the island when they were there than permanent residents would spend. To address this point, it is recognised that the threshold for second home classification is aligned to an occupancy period of at least 25 days per year. It is therefore considered that, on balance, the economic benefits of higher levels of occupancy throughout the year are expected to outweigh the economic benefits of increased levels of spending over shorter periods of time. How will you address these? The impact of the policy will be monitored to assess the ongoing impact and extent of behavioural shift in property ownership models on the islands. This will include the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. The proposed policy includes a further top-slice of funding to support investment in affordable housing for North Ayrshire. The 10% allocation from the proposed 100% council tax premium builds on an initial 40% from the current level of second home council tax. This means that 25% of the total proposed charge for council tax on second homes will be invested in affordable housing across North Ayrshire. You must now determine whether in your opinion your policy, strategy or service is likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities). Yes - due to the relatively high proportion of second home ownership in Cumbrae it is considered that the policy is likely to have an effect on this island community which is significantly different from its effect on other communities. It is anticipated that the effect of the policy on Cumbrae would likely differ to the effect on Arran due to the different profile of the council tax banding of second homes on each island as detailed above. This may make it more likely that a greater number of second homes on Cumbrae will be sold or converted
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to holiday lets, compared to Arran, as property owners may be less willing or able to absorb the additional expense. Due to the property types, especially across Bands A and B, there may be less demand for such properties in the event of them being put up for sale or rented out, which could lead to larger numbers of properties being placed on the market for longer periods of time if supply exceeds demand. Again, the actions of each second home owner were the policy to be introduced would depend on their own personal and financial circumstances and the overall impact on the island economy is therefore difficult to predict. However, it is noted that there would likely be less impact on tourism in Cumbrae compared to Arran due to the short travel time of the ferry, as the island would continue to benefit from seasonal day-trippers and short stay tourists. If the answer is YES, an ICIA must be prepared and you should proceed to Step Five STEP FIVE – PREPARING YOUR ICIA Assess the extent to which you consider that the policy, strategy or service can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. This policy change would be applied across the whole of North Ayrshire and affect those individuals who currently own a second home. Currently all second homeowners pay full council tax on their second home and this change would result in a 100% premium being applied, therefore, resulting in a 200% council tax charge. These charges will vary depending on the council tax Band of the property, ranging from an annual premium of £968 for a Band A property to £3,558 for a Band H property. The main policy intent behind this change is ultimately to influence a behavioural change in current ownership models that would then result in more permanent home occupancy or a greater level of home occupancy from the current minimum of 25 days per annum related to second home ownership. The proposed policy includes a further top-slice of any revenue generated to support investment in affordable housing. In total,
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25% of all council tax revenue generated from second homes in North Ayrshire would be directed towards investment in affordable homes. Any investment would continue to be needs based and in accordance with North Ayrshire’s Local Housing Strategy (LHS) 2023 – 2028 approved at Cabinet on 13 June 2023. Any subsequent property sale or rental or even switch to the rates-based holiday rental could lead to a greater level of home occupancy and have a net positive economic benefit to the islands, when compared to the current threshold of a minimum of 25 days occupancy. It is recognised that the impact on the housing market across both islands through sale or rent will be influenced by the type of property supply being placed and the market and the demand for these property types. There is a risk, which is probably more acute in Cumbrae, that this change could potentially lead to more housing supply for lower Banded properties being available on the market and that this is not matched by an equivalent level of demand for such properties. It is important that, should this policy be implemented, any impacts are monitored within the context of both island economies. This will include monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. With external support, house prices on the islands will also be monitored. It is also recognised that the application of this policy could also generate additional revenue for the Council. This is against a backdrop of significant budget challenges for all Councils. The use of such statutory powers would help mitigate the impact of budget gaps and help protect vital Council services.
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It should also be noted that separate to the current number of second homes across both islands there are also properties designated as holiday lets, totalling around 60 in Cumbrae (and over 300 in Arran), providing tourist accommodation to support this sector. The consultation responses included reference to a number of mitigation measures from respondents e.g. suggestion of a sliding scale of premium charge depending on property type. To address this point, it is considered that the current council tax banding allocated to properties is in effect a built-in sliding scale that aligns to historic property valuations. Further, responses included requests that additional revenue generated by the scheme should be ring-fenced for spending on the island that generated the income. To address this point, within the context of the challenging fiscal environment that councils are operating in it is recognised that this revenue will help protect vital council services, however, it is also important to note that the proposals include a 10% top-slice of funding to support investment in affordable housing. This being based on need and in accordance with the North Ayrshire Council Local Housing strategy. Any unintended consequences of the policy will be closely monitored so that appropriate steps can be taken to minimise any negative outcomes for the community as required. Consider alternative delivery mechanisms and whether further consultation is required. Due to the complex and changing nature of people’s individual circumstances and ultimately the choices they make, it is difficult to predict the level of housing ownership shift across both islands that may result as a consequence of the application of a 100% council tax premium on second homes,
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or indeed the level of any unintended consequences of this policy. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from engagement groups. Extensive feedback from the Consultation has been gathered and is included in appendix 1 of the report. From the 398 respondents to the survey on proposals relating to Taxes and Levies, 44 (11.06%) related to Arran and 70 (17.59%) related to the North Coast and Cumbrae. From the 507 respondents to the more targeted survey, 247 (49%) related to Arran and 155 (31%) related to the North Coast and Cumbrae. Feedback was also provided by the following Engagement Groups: Redburn Grove Tenants Group; 3Towns Community Shed; Healing Hearts Group; Scottish Syrian Roses; Long Covid Group; Kilbirnie Residents – Syrian & Ukrainian New Scots Women; Big ESOL class, Syrian, Afghan learners; Garnock Community Campus Umbrella Club; Newton Mens Shed; Online Consultation – Ukrainian; and NAFCO. Of the respondents to the Taxes and Levies survey, 114 (30.56%) respondents indicated that the proposal would have a high impact on them or their community; 105 (28.15%) indicated that the proposal would have no impact on them or their community; 80 (21.45%) indicated that the proposal would have a low impact on them or their community, and 74
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(19.84%) were unsure how much impact the proposal would have on them or their community. Of the respondents to the more targeted survey on the proposal, 299 (59%) respondents indicated that the Council should not apply a premium on council tax. However to provide further context, 209 (41%) respondents identified as being a current second home owner. A range of views were expressed in response to both surveys including reference to:- • Impact of the local economy and tourism received mixed views • The fairness of any charge, again received mixed opinions • Around 146 current second homeowners who responded to the more targeted survey indicated they would sell their property if the premium was introduced and 75 owners indicated they would pay the premium, keep their property and continue to use it as a second home. Given the level of feedback from the recent programme of engagement, further consultation is not considered necessary at this time, however it is important that, should this policy be implemented, any impacts are monitored within the context of both island economies. This will include monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. With external support, house prices on the islands will also be monitored.
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Describe how these alternative delivery mechanisms will improve or mitigate outcomes for island communities. Any required mitigations will continue to be assessed on an ongoing basis. Identify resources required to improve or mitigate outcomes for island communities. As above. STEP SIX – MAKING ADJUSTMENTS TO YOUR WORK Should delivery mechanisms/mitigations vary in different communities? This policy change would be applied across the whole of North Ayrshire, including both islands and the mainland. Whilst it is recognised that both islands have a high proportion of second homes and each island has its own characteristics and challenges this assessment has been completed based on the policy being applied across the whole area. Any behavioural change will be influenced by the economic circumstances of the current second homeowner. Given the high proportion of second home ownership in both island communities it is important for the realisation of the policy objectives that the policy applies to the islands in the same way that it applied to the mainland. It is currently anticipated that the impact of this policy would be positive for the island by increasing the level of home occupancy and prioritising homes for living in on a more permanent basis. In the event of any unintended consequences of this policy being identified in the course of ongoing monitoring, including but not limited to the potential barriers or wider impacts identified at step 4 above, consideration will be given to appropriate steps which may be required to mitigate these across different communities as required. Do you need to consult with island communities in respect of mechanisms or mitigations? Island communities have provided feedback to the on-line survey delivered as part of the Council’s Budget engagement programme. From the 507 total respondents to the targeted survey on this proposal, 247 (49%) were from Arran and 155 (31%) from the Isle of Cumbrae. In the event of any unintended consequences of this policy being identified in the course of
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ongoing monitoring, consideration will be given to appropriate steps which may be required to mitigate these across different communities as required, including whether further consultation is required. Have island circumstances been factored into the evaluation process? The particular circumstances in Cumbrae have factored into the evaluation process as set out above. Have any island-specific indicators/targets been identified that require monitoring? In December 2019, Scottish Ministers published the first ever National Islands Plan, which was created with the input from many islanders, including those on Arran and Cumbrae. The current Plan sets out 13 Strategic Objectives which are practical yet critical to improving the quality of life for island communities. The 13 strategic objectives (SOs) set out in the National Islands Plan include:- • To address population decline and ensure a healthy, balanced population profile • To improve and promote sustainable economic development • To improve transport services • To improve housing • To reduce levels of fuel poverty • To improve digital connectivity • To improve and promote health, social care and wellbeing • To improve and promote environmental wellbeing and deal with biosecurity • To contribute to climate change mitigation and adaptation and promote clean, affordable and secure energy • To empower diverse communities and different places • To support arts, culture and language
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• To promote and improve education for all throughout life • To support effective implementation of the National Islands Plan It is recognised that a number of the national strategic objectives included above could be impacted either directly or indirectly through this new policy initiative i.e. through these measures that results in more home occupancy and more permanent housing availability and affordability. The behavioural shift could help address affordable housing need through an increase in housing supply and help grow the island population and provide more accommodation for staff to deliver vital public services. It is within the above context that, following any new policy implementation, through monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets, along with external support to help monitor house prices on the islands, it is anticipated this will provide a sufficient level of information to assess the ongoing impact of the policy. How will outcomes be measured on the islands? Monitoring the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets, along with external support to help monitor house prices on the islands, it is anticipated this will provide a sufficient level of information to assess the ongoing impact of the policy and any associated outcomes. How has the policy, strategy or service affected island communities? This would be monitored on an ongoing basis. How will lessons learned in this ICIA inform future policy making and service delivery? This would be assessed on an ongoing basis as the policy was implemented. STEP SEVEN – PUBLISHING YOUR ICIA
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Have you presented your ICIA in an Easy Read format? Does it need to be presented in Gaelic or any other language? This is not considered proportionate for the Island or wider North Ayrshire community Where will you publish your ICIA and will relevant stakeholders be able to easily access it? The completed ICIA will be included in a report to North Ayrshire Council scheduled for 12 February 2025, therefore, the information will be publicly available. Who will sign-off your final ICIA and why? ICIA approved by: ………………Mark Boyd…………………………………………………………… Position: ………………Head of Finance…………………………………………………………… Signature: ……… …………………………………………………………………… Date completed: ………………28/01/2025……………………………………………………………
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Appendix 3 Additional Income from Second Homes Premiums Band Total 2024/25 Council Tax Additional Premium (100%) 2025/26 Proposed Charge Gross Income 10% Bad Debt Provision Net Additional Income A 426 968.08 968.08 1,936.16 412,402 -41,240 371,162 B 204 1,129.42 1,129.42 2,258.84 230,402 -23,040 207,362 C 234 1,290.77 1,290.77 2,581.54 302,040 -30,204 271,836 D 222 1,452.12 1,452.12 2,904.24 322,371 -32,237 290,134 E 249 1,907.92 1,907.92 3,815.84 475,072 -47,507 427,565 F 109 2,359.69 2,359.69 4,719.38 257,206 -25,721 231,486 G 30 2,843.73 2,843.73 5,687.46 85,312 -8,531 76,781 H 2 3,557.69 3,557.69 7,115.38 7,115 -712 6,404 Total 1,476 2,091,920 -209,192 1,882,728 Potential Impact if 10% of Second Homes were sold or transferred to the Private Rental Market: Percentage Transferred Number sold or Transferred to Rent Gross Income 10% Bad Debt Provision Net Additional Income 10% 148 -209,165 20,917 -188,248 Potential impact if 10% of Second Homes were removed from the Council Tax register: Impact Number Removed from CT Register Gross Income Bad Debt Provision Net Additional Income Statutory 50% 148 -104,583 4,183 -100,400 Affordable Housing 40% 148 -83,666 3,346 -80,320 Discretionary 10% 148 -20,917 837 -20,080 Premiums 100% 148 -209,165 20,917 -188,248 Total Impact 148 -418,331 29,283 -389,048 Net Additional Income from Second Homes Premiums Band Total 2025/26 Additional Income 10% Sold / Rented 10% Transferred to NDR Net Additional Income 10% Affordable Housing Contribution to the General Fund A 426 371,162 -37,465 -77,427 256,270 -25,627 230,643 B 204 207,362 -21,346 -44,115 141,900 -14,190 127,710 C 234 271,836 -26,719 -55,219 189,898 -18,990 170,908 D 222 290,134 -28,752 -59,421 201,961 -20,196 181,765 E 249 427,565 -42,928 -88,718 295,918 -29,592 266,327 F 109 231,486 -23,361 -48,279 159,845 -15,985 143,861 G 30 76,781 -7,678 -15,868 53,235 -5,323 47,911 H 2 6,404 0 0 6,404 -640 5,763 Total 1,476 1,882,728 -188,249 -389,048 1,305,432 -130,543 1,174,888
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Appendix 4 - Version: 7.0 North Ayrshire Council Equality & Children’s Rights Impact Assessment (Full Form) Introduction This form will assist in carrying out an Equality Impact Assessment and where appropriate, Socio-Economic, Children’s Rights, Island Communities and Consumer Duty Impacts of new, revised and existing policies and practices. Guidance on how to complete assessments is given in the Council’s Equality and Children’s Rights Impact Assessment Toolkit. The form is mandatory and must be published on the Council website once the policy or practice has been approved. Section 1: General Details 1.1 Directorate/Service Corporate Services : Section: Finance 1.2 Name of Policy, Practice of Proposal being assessed: Council Tax Premium applied to Second Homes Is it New x Existing (being reviewed): ☐ Budget Proposal: ☐ Please insert Budget Reference number (if applicable) Click or tap here to enter text. 1.3 List of participants in the assessment Mark Boyd, Andrew Hale, Claire Cochrane 1.4 Manager responsible for the impact assessment Name: Mark Boyd Designation: Head of Service 1.5 Timetable Date Assessment Started: 03/02/2025 Interim Review Date: 04/02/2025 Final sign off by Head of Service at the end of the form.
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Appendix 4 - Version: 7.0 Section 2 – Aims and Relevance 2.1 What is the purpose of the policy practice or proposal? The policy objective is to make the council tax system work as an incentive to prioritise homes for living in on a more permanent basis and increasing the level of home occupancy. By applying a 100% premium on council tax for second homes, which would bring this in line with the position across long-term empty properties for North Ayrshire, it is anticipated this would influence behavioural changes across current second home ownership in Scotland and in North Ayrshire to bring more housing into use to support greater occupancy and it is also recognised that the behavioural shift could also lead to more holiday let properties. This would be through a modal shift from second home occupancy of at least 25 days per annum to more permanent levels of occupancy through sale or rental, and in the case of holiday lets, a potentially greater level of occupancy throughout the year against the measurement of the property being available for rent for 140 days per year and actually let for at least 70 days per year. Both shifts could also have wider economic benefits to the local economy. It is also recognised that the application of this policy could also generate additional revenue for the Council. This is against a backdrop of significant budget challenges for all Councils. The use of such statutory powers would help mitigate the impact of budget gaps and help protect vital Council services.
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Appendix 4 - Version: 7.0 Section 3 – Equality and Diversity 3.1 What evidence were you able to access about the relevant needs of protected groups as outlined in section 3.3 below (Please include your sources – links to equality providers and evidence can be found in both the toolkit and the Promoting Equality Page on Connects). Click or tap here to enter text. 3.2 Are there any gaps in your evidence or areas of uncertainty? Click or tap here to enter text. 3.3 From the list of protected characteristic groups identified in section 2.3 please identify any potential positive and negative impacts on any of these protected characteristics? Protected Characteristic Yes No Please Explain (Positive or Negative or Neutral) Age - Older people, children and young people – please identify which categories will be affected ☒ ☐ There may be some people in the older age category who might be impacted by the increased cost of maintaining a second home. Younger people may benefit from the policy if it results in more affordable housing becoming available. Disability - Physical and Learning ☐ ☒ Gender reassignment - Where a person is living as the opposite gender to their birth ☐ ☒ Pregnancy and Maternity ☐ ☒ Race, ethnicity, colour, nationality or national origins (including gypsy/ travellers, refugees and asylum seekers) ☐ ☒
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Appendix 4 - Version: 7.0 Protected Characteristic Yes No Please Explain (Positive or Negative or Neutral) Religion or belief (includes religious and philosophical beliefs, including no belief) ☐ ☒ Sex - Women and Men ☐ ☒ Sexual Orientation - Lesbian, gay and bisexual people ☐ ☒ Marriage and Civil Partnership - marriage between same sex couples is included ☐ ☒ Human Rights ☐ ☒ Care Experienced - This term refers to anyone who is currently in care or has been for any length of time regardless of their age and includes Kinship Care (other family members); Looked After at Home (with support from social work); Residential Care; Foster Care; Secure Care; Adoption. ☐ ☒
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Appendix 4 - Version: 7.0 Protected Characteristic Yes No Please Explain (Positive or Negative or Neutral) Other - Poverty, homelessness, ex-offenders, isolated rural communities, carers, part-time workers, or people in a marriage/civil partnership ☒ ☐ Rural communities, It is recognised that both islands have a high proportion of second homes when compared to the mainland, therefore the impact of this policy could be proportionally greater across the Island communities than that of the mainland (this is covered in more detail in the Islands Communities Impact Assessment). Lower-income families may benefit from the policy if it results in more affordable accommodation becoming available. 3.4 Describe any consultation or engagement undertaken, including details of the groups involved and the methods used. The North Ayrshire Council meeting of 14 February 2024 agreed that a programme of consultation should be undertaken on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring in particular that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, which received 501 responses, particularly those most directly affected, were asked to contribute to. Feedback was also gathered from 38 engagement session with various groups, of which 30 sessions provided feedback on this proposal. Questions 3.5 – 3.7 refer to the ‘Three Key needs (or aims) of the Equality Duty’ 3.5 Which aspects of the policy eliminate unlawful discrimination, harassment and victimisation? There is no impact regarding this. 3.6 Which aspects of the policy advance equality of opportunity between people who share a relevant protected characteristic and those who do not?
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Appendix 4 - Version: 7.0 This is not relevant for this proposal 3.7 Which aspects of the policy foster good relations between people who share a protected characteristic and those who do not? (Does it tackle prejudice and promote a better understanding of equality issues). This is not relevant for this proposal 3.8 If you have identified any negative impacts of your proposal how will you mitigate these? Older people may be more likely to own second homes, and may therefore be more likely to be affected by the policy. Second home owners who are of pension age may be more likely than others to have less disposal income available to absorb an increase to Council Tax. However, the policy objective is to encourage behavioural change by bringing more housing into use to support greater occupancy. It is also recognised that the behavioural shift could also lead to more holiday let properties. Anyone facing financial difficulties as a result of the proposal would have a range of options to mitigate these difficulties based on their personal circumstances and preferences. Any behavioural shifts resulting in greater occupancy, whether by permanent residents or a higher turnover of tourists, could have wider economic benefits to the local economy. 3.9 Is the policy or practice intended to promote equality by permitting positive action or lead to positive outcomes for people based on a protected characteristic? Not Applicable
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Appendix 4 - Version: 7.0 Section 4 – The Fairer Scotland Duty The Fairer Scotland Duty (‘the Duty’), Part 1 of the Equality Act 2010 places a legal responsibility on the Council to actively consider (‘pay due regard to’) how we can reduce inequalities of outcome caused by socio-economic disadvantage when making decisions. 4.1 Does the proposal have the potential to have a significant impact on inequalities of outcome caused by socio-economic disadvantage? (consider low income; low wealth; material deprivation; area deprivation; communities of place or interest, socio-economic background). Yes ☒ No ☐ If No, please go to Section 5. If Yes please provide more information under any of the below headings which are relevant, highlighting any evidence and sources of evidence used to inform your information. 4.2 Low Income/Income Poverty: Cannot afford to maintain regular payments such as bills, food and clothing N/A 4.3 Low/and or no wealth: Having enough money to meet basic living costs and pay bills but have no savings to pay for any unexpected spends and no provision for the future. N/A? 4.4 Material Deprivation: Being unable to access basic goods and services, i.e. financial products like life insurance, repair/replace broken electrical goods, warm home, leisure/hobbies N/A? 4.5 Area Deprivation: Where you live (rural areas), where you work (accessibility of transport. The economic impact of second homes on local communities is complex and the impact is not always clear, factors such as frequency of use and local housing market dynamics play a part in this. Results from the Budget Consultation indicated that some respondents feel that the proposal has the potential to damage the local economy, given the high level of tourism on the Islands. Other respondents indicated that second homes that sit empty for long periods can exacerbate housing shortages for locals, particularly young people trying to get on the housing ladder. A
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Appendix 4 - Version: 7.0 number of comments focused on the need for more affordable housing for island residents, particularly for young people and workers, as second homes are seen as contributing to inflated housing prices and limited availability. Views were therefore mixed on whether the proposed changes would be likely to have a positive or negative impact on island economies. Expected positive economic impacts were primarily linked to the potential for improved access to housing for workers. A shortage of affordable housing was identified as a key barrier to recruitment for some island economies, and de-population was also highlighted as limiting economic growth for some islands. There were also concerns about the loss of investment from second home buyers, linked to a view that this investment has been crucial in bringing empty or derelict homes back into use across many island communities. It was also suggested that loss of this investment could have an adverse impact on tourism activity if the appearance and amenity of communities are affected. Respondents to the consultation, in general felt that the proposals would be likely to have positive community impacts. This was primarily associated with a reduction in second homes and short-term lets resulting in more year-round occupancy. It was suggested that this would support the sustainability of island communities, and again there was reference to limiting rural depopulation. . 4.6 If impacts have been identified how will these be mitigated or explored in more detail? (please outline below) There are both potential positive and negative elements that maybe realised from the implementation of this proposal. Should this proposal go ahead, any impact of the policy will be monitored to assess the ongoing impact and extent of behavioural shift in property ownership models on the islands. This will include the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. 25% of the total proposed charge for council tax on second homes will be invested in affordable housing across North Ayrshire. The longer-term economic impact will also be monitored; it is in the Council’s best interest to support a vibrant flourish economy on the Islands as well as the mainland. Section 5 – Children’s Rights When considering the Children’s Right’s Impact process, some of the key considerations include any evidence, research and consultation (specifically including any consultation or engagement with young people). 5.1 Are any Children’s Rights impacted by this proposal? (please refer to Appendix 1 of this document, where the Children’s Rights Articles have been matched against the Getting It Right For Every Child (GIRFEC) wellbeing indicators. This
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Appendix 4 - Version: 7.0 is solely to make it easier to identify which rights might be impacted on; the Rights are the key element of this section). Yes ☐ No ☒ 5.2 Please indicate, if possible, how many children and young people (nearest estimate) are likely to be affected by the policy or measure? Click or tap here to enter text. 5.3 Are some children and young people more likely to be affected than others? Yes ☐ No ☒ If, Yes what groups? (consider protected characteristics – e.g. disabled young people, LGBT etc) Click or tap here to enter text.
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Appendix 4 - Version: 7.0 5.4 What Children’s Rights are likely to be affected by the policy/proposal? Please refer to Table 2 (Appendix 1) ‘Links between Wellbeing Indicators and Articles of the UNCRC’ and insert the relevant rights and indicators in the table below. Wellbeing indicator (e.g. safe, healthy etc) Children’s Right (e.g. 22 – refugee children) Click or tap here to enter text. Click or tap here to enter text. 5.5 What likely impact will the policy/proposal have on Children’s Rights and Wellbeing? Either Positive, Negative or Neutral. Children Rights - Click or tap here to enter text. Other Protected Characteristics Click or tap here to enter text. 5.7 What consultation or engagement has taken place with young people? Click or tap here to enter text. 5.6 If Negative impacts are identified how will these be mitigated, or the effect reduced? Click or tap here to enter text.
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Appendix 4 - Version: 7.0 Section 6 – Island Communities Impact (or Island Proofing) Island Proofing is about considering the particular needs and circumstances of island communities when public sector organisations exercise their functions and make decisions. This has been added to the process of assessing the Council Plan and includes a range of issues such as access to services, digital connectivity, employment and access to education, transport and access to goods and services. 6.1 Do the intended outcomes of the proposal potentially differ or have a different impact for our Island Communities? Yes ☒ No ☐ Please see separate Island Communities Impact Assessments in respect of Arran and Cumbrae. 6.2 What are the potential impacts for our Island Communities? Click or tap here to enter text. 6.3 Please explain if the impacts are different for communities on different islands? Click or tap here to enter text. 6.4 What consultation or engagement has taken place with the Island Communities? Click or tap here to enter text. 6.5 How will you address any potential barriers or wider impacts for Island Communities as identified through this assessment? Click or tap here to enter text. Section 7 – The Consumer Duty The Consumer Duty is about the impact of Council proposals on consumers in Scotland. A Consumer is an individual or a small business that purchases, uses or receives goods or services in Scotland, that are supplied either by a business or a public body – please see What is the Consumer Duty. 7.1 Will your proposal impact on consumers? Yes ☒ No ☐ If no, please complete the ‘Assessment not required’ template by emailing northayrshireperforms@north-ayrshire.gov.uk
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Appendix 4 - Version: 7.0 7.2 What are the impacts, if any, on consumers in general? Is it likely that consumers will experience harm because of this proposal? Consumers who own second homes would be required to pay additional council tax as a result of this proposal, and may choose to sell their property or change its use to avoid this. Second home owners may therefore feel that they would experience harm because of this proposal. To the extent that the policy generates additional revenue for the Council, consumers in North Ayrshire more widely would benefit from the range of Council services which would be delivered as a result of this. If the policy results in more second homes being converted to holiday lets then it would result in more choice for consumers who wish to visit the local area, which would be a positive impact. Consultation respondees noted that many small businesses and sole traders in island communities depend heavily on second home owners for business. The policy may therefore result in harm if such small businesses and sole traders experience a downturn in business as a result. However, it should also be noted that if the policy results in greater levels of occupancy then any negative impact may be offset by a more regular customer base of permanent residents or more frequent tourists. 7.3 What are the impacts if any, on consumers in vulnerable circumstances? Is it likely that consumers in vulnerable circumstances will experience harm because of this proposal? (please include any relevant evidence or engagement with consumers) *Vulnerable circumstances may be temporary in nature and may or may not arise as a resulted of a consumer’s protected characteristics. For more information, please see page 31 of Consumer Scotland’s draft guidance on the consumer duty. Consumers in vulnerable circumstances may be more susceptible to be impacted by any wider changes in economic conditions which result from the policy, and the wider economic impact will therefore be kept under review. More generally, it is anticipated that the consumers most likely to be directly affected by the policy (second home owners) are unlikely to be in vulnerable circumstances. 7.4 What consultation and engagement has taken place with consumers around your proposal? A programme of consultation was delivered from 10 October 2024 to 25 November 2024. This was in the form of an on-line survey on proposals relating to Taxes and Levies as part of the Council’s Budget Engagement programme, as well as a more targeted on-line survey which residents and businesses, which received 501 responses, particularly those most directly affected, were
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Appendix 4 - Version: 7.0 asked to contribute to. Feedback was also gathered from 38 engagement session with various groups, of which 30 sessions provided feedback on this proposal. 7.5 What alternative proposals are there that could improve outcomes for consumers and/or reduce harm to consumers? How do these compare to the original proposal? The economic impacts of the policy would be monitored on an ongoing basis and further consideration would be given to any mitigations that may be required as the impacts of the policy were better understood. It is proposed that the Council introduce a discretionary 50% discount where a property purchased less than six months ago is undergoing repairs or renovations which contribute to the improvement of the property. The discount could be applied for a period of up to 12 months, which would reduce harm to consumers who purchase a second home which requires to undergo repairs or renovations.
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Appendix 4 - Version: 7.0 Section 8 – Crosscutting Impacts 8.1 Have any cross-cutting impacts been identified from other Council Services or Partner Agencies (multiple discrimination or accumulated effects of multiple proposals on a protected characteristic group)? No crosscutting impacts have been identified. 8.2 If Crosscutting issues identified with other Services, what discussion/interaction has taken place to mitigate any potential negative impacts of accumulated proposals? N/A
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Appendix 4 - Version: 7.0 Section 9 – Outcome of the Assessment 9.1 Please detail the outcome of the assessment: 1. No major alterations to the policy assessed: the Impact Assessment demonstrates the policy is robust and there is no possible discrimination or adverse impact. All opportunities to minimise negative impacts and enhance positive outcomes have been taken. ☐ Or 2. Adjust the policy: the Impact Assessment identifies potential problems or missed opportunities. Adjust the policy to address any issues identified or to better promote equality. ☐ Or 3. Continue the policy: the Impact Assessment identifies the potential for adverse impact or missed opportunities to promote equality. Set out the justifications for continuing with it in section 9.3. For the most important policies and proposals, compelling reasons will be needed. ☒ Or 4. Stop and remove the policy/proposal: following assessment a decision has been taken not to proceed with the proposal for examples due to actual or potential unlawful discrimination or other harmful impact. ☐ 9.2 For Outcome 2. in section 9.1 above - please detail recommendations, including any action required to address negative impacts identified or to better promote equality. Click or tap here to enter text. 9.3 If Outcome 3 is chosen from section 9.1 above, please outline the justifications for continuing the policy/procedure. Consultation feedback expressed mixed views as to whether the policy was likely to have a positive or negative impact overall. On the basis of the evidence presently available, it is considered, on balance, more likely that the policy would result in more positive economic impacts than negative. However, given that the impact of the policy would be dependent on the individual choices of second home owners and potential purchasers/tenants/holiday makers, it is not possible to accurately predict the impact in advance of the policy being brought into force, if approved. 9.4 Please state the key issues, recommendations and future actions arising from the Integrated Impact Assessment.
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Appendix 4 - Version: 7.0 There has been extensive consultation on this proposal as detailed above. In terms of next steps, this ECRIA will be presented to elected members to assist in the decision-making process.
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Appendix 4 - Version: 7.0 Section 10 – Monitoring 10.1 Describe how you will monitor the impact of this policy e.g. performance indicators used, other monitoring arrangements, who will monitor progress, criteria used to measure if outcomes are achieved, timescales including any future reviews of the impact of the proposal? Should this proposal go ahead, any impact of the policy will be monitored to assess the ongoing impact and extent of behavioural shift in property ownership models on the islands. This will include the number of second homes retained, the number of homes sold or rented, and the number of homes changed to holiday lets. 25% of the total proposed charge for council tax on second homes will be invested in affordable housing across North Ayrshire. The longer-term economic impact will also be monitored; it is in the Council’s best interest to support a vibrant flourish economy on the Islands as well as the mainland. Section 11 – Sign Off 11.1 Head of Service who has approved the impact assessment. Name: Mark Boyd Title: Head of Service (Finance) Date: 04/2/2025 Section 12 – Publication 12.1 Following approval by Head of Service, completed Impact Assessments need to be published on the Council’s External Website. Please email: northayrshireperforms@north-ayrshire.gov.uk
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Appendix 4 - Version: 7.0 Appendix 1 - GIRFEC Wellbeing Indicators and Children’s Rights Table 1 - GIRFEC Wellbeing Indicators Safe Protected from abuse, neglect and harm Healthy Having the best possible standards of physical and mental health; support to make healthy, safe choices Achieving Accomplishing goals and thereby boosting skills, confidence and self-esteem; ‘being all they can be’. Nurtured Having a loving and stimulating place to live and grow Active Having opportunities to take part in a wide range of activities Respected Being enabled to understand their world, being given a voice, being listened to, and being involved in the decisions that affect their wellbeing. Responsible Taking an active role within their home, school and community. Included Being a full member of the communities in which they live and learn; receiving help and guidance to overcome inequalities.
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Appendix 4 - Version: 7.0 Articles of the UNCRC matched against the GIRFEC indicators Summary of the UNCRC Articles from 1 – 54 (UNICEF) Table 2 - Links between Wellbeing Indicators and Articles of the UNCRC *Please note in general the use of the term Governments, includes public sector organisations such as the Council, some articles will have stronger relevance for the work of the Council than others. Wellbeing Indicator – Safe There are 12 relevant articles of the UNCRC (Rights of the Child) linked to the Safe indicator. Article 9 – Separation from parents Children must not be separated from their parents against their will unless it is in their best interests (for example, if a parent is hurting or neglecting a child). Children whose parents have separated have the right to stay in contact with both parents, unless this could cause them harm. 10 – Family reunification Governments must respond quickly and sympathetically if a child or their parents apply to live together in the same country. If a child’s parents live apart in different countries, the child has the right to visit and keep in contact with both of them. 11 - Abduction and non-return of children Governments must do everything they can to stop children being taken out of their own country illegally by their parents or other relatives or being prevented from returning home. 19 - Protection from violence, abuse and neglect Governments must do all they can to ensure that children are protected from all forms of violence, abuse, neglect and bad treatment by their parents or anyone else who looks after them. Children and Young People have the right to be kept safe from harm. They must be given proper care by those looking after them. 22 - Refugee children If a child is seeking refuge or has refugee status, governments must provide them with appropriate protection and assistance to help them enjoy all the rights in the Convention. Governments must help refugee children who are separated from their parents to be reunited with them. Children and Young People have the right to special help and be allowed to live somewhere that is safe if they are a refugee.
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Appendix 4 - Version: 7.0 32 - Child labour Governments must protect children from economic exploitation and work that is dangerous or might harm their health, development or education. Governments must set a minimum age for children to work and ensure that work conditions are safe and appropriate. If they are under 16 there are laws about where, when and for how long they can work. 33 - Drug abuse Governments must protect children from the illegal use of drugs and from being involved in the production or distribution of drugs. 34 - Sexual exploitation Governments must protect children from all forms of sexual abuse and exploitation. Children and Young People have the right to never be pressurised or forced into doing anything sexual. They have the right to be protected from it. 35 - Abduction, sale and trafficking Governments must protect children from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation. People should never make them do anything against their will, like marry someone for instance. 36 - Other forms of exploitation Governments must protect children from all other forms of exploitation, for example the exploitation of children for political activities, by the media or for medical research. Children and Young People have the right to be protected from being taken advantage of in any way. 37 - Inhumane treatment and detention Children and Young People have the right to be treated with respect. If they have committed a crime children should be arrested, detained or imprisoned only as a last resort and for the shortest time possible. They must be treated with respect and care, and be able to keep in contact with their family. Children must not be put in prison with adults. They should not be locked up unless it is absolutely necessary and they will get legal help. 38 - War and armed conflicts Governments must not allow children under the age of 15 to take part in war or join the armed forces. Governments must do everything they can to protect and care for children affected by war and armed conflicts. In Scotland, they have to be 16 to join the armed forces and are not normally allowed to fight until they are 18.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Healthy There are 4 relevant articles of the UNCRC (Rights of the Child) linked to the Healthy indicator. 3 – Best interests of the child The best interests of the child must be a top priority in all decisions and actions that affect children. Children and Young People have the right to have their interests considered if a decision is being made by any person about them. What is best for them is what matters. 6 – Life, survival and development Every child has the right to life. Governments must do all they can to ensure that children survive and develop to their full potential. Children and Young People have the right to be kept safe from harm, they have the right to be alive, survive and develop through life. 24 - Health and health services Every child has the right to the best possible health. Governments must provide good quality health care, clean water, nutritious food, and a clean environment and education on health and well-being so that children can stay healthy. Children and Young People have the right to be given good healthcare (if they are ill) so they can get well again. They have the right to live in a safe, healthy environment with good food and clean drinking water. 39 - Recovery and rehabilitation of child victims Children who have experienced neglect, abuse, exploitation, torture or who are victims of war must receive special support to help them recover their health, dignity, self-respect and social life.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Achieving There are 4 relevant articles of the UNCRC (Rights of the Child) linked to the Achieving indicator. 4 – Implementation of the Convention Governments must do all they can to make sure every child can enjoy their rights by creating systems and passing laws that promote and protect Children’s Rights. Children and Young People have the right to have their rights protected and an environment where they can grow up safe. 18 - Parental responsibilities and state assistance Both parents share responsibility for bringing up their child and should always consider what is best for the child. Governments must support parents by creating support services for children and giving parents the help they need to raise their children. 28 - Right to education Every child has the right to an education. Primary education must be free and different forms of secondary education must be available to every child. Discipline in schools must respect children’s dignity and their rights. Richer countries must help poorer countries achieve this. In Scotland education is free and children three years old+ are entitled to a free nursery place. 29 - Goals of education Education must develop every child’s personality, talents and abilities to the full. It must encourage the child’s respect for human rights, as well as respect for their parents, their own and other cultures, and the environment. It must help to prepare them for adult life.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Nurtured There are 8 relevant articles of the UNCRC (Rights of the Child) linked to the Nurtured indicator. 4 – Implementation of the Convention Governments must do all they can to make sure every child can enjoy their rights by creating systems and passing laws that promote and protect children’s rights Children and Young People have the right to have their rights protected and an environment where they can grow up safe. 5 - Parental guidance and a child’s evolving capacities Every child has the right to be registered at birth, to have a name and nationality, and, as far as possible, to know and be cared for by their parents. Children and Young People have the right to their parents being responsible to guide them through their childhood and help them learn how to use their rights. 9 – Separation from parents Children must not be separated from their parents against their will unless it is in their best interests (for example, if a parent is hurting or neglecting a child). Children whose parents have separated have the right to stay in contact with both parents, unless this could cause them harm. 10 – Family reunification Governments must respond quickly and sympathetically if a child or their parents apply to live together in the same country. If a child’s parents live apart in different countries, the child has the right to visit and keep in contact with both of them. 18 - Parental responsibilities and state assistance Both parents share responsibility for bringing up their child and should always consider what is best for the child. Governments must support parents by creating support services for children and giving parents the help they need to raise their children. 20 - Children deprived of a family If a child cannot be looked after by their immediate family, the government must give them special protection and assistance. This includes making sure the child is provided with alternative care that is continuous and respects the child’s culture, language and religion. Children and Young People have the right to special care if they can’t live with their parents. They may be looked after by other members of their family or by a different family. 21 - Adoption Governments must oversee the process of adoption to make sure it is safe, lawful and that it prioritises children’s best interests. Children should only be adopted
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Appendix 4 - Version: 7.0 outside of their country if they cannot be placed with a family in their own country. 25 - Review of treatment in care If a child has been placed away from home for the purpose of care or protection (for example, with a foster family, in hospital, a care home or somewhere else away from home), they have the right to a regular review of their treatment, the way they are cared for and their wider circumstances to help make sure they are still getting what’s best for them. 27 - Adequate standard of living Every child has the right to a standard of living that is good enough to meet their physical and social needs and support their development. Governments must help families who cannot afford to provide this. Children and Young People have the right to a safe place to live, food, clothing and to take part in things they enjoy.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Active There are 8 relevant articles of the UNCRC (Rights of the Child) linked to the Nurtured indicator. 3 - Best interests of the child The best interests of the child must be a top priority in all decisions and actions that affect children. Children and Young People have the right to have their interests considered if a decision is being made by any person about them. What is best for them is what matters. 23 - Children with disabilities A child with a disability has the right to live a full and decent life with dignity and, as far as possible, independence and to play an active part in the community. Governments must do all they can to support disabled children and their families. Children and Young People have the right to if they have any kind of disability, have special help to make sure they can join in with things. 31 - Leisure, play and culture Children and Young People have the right to rest, play and have the chance to join a wide range of artistic and cultural activities. It is really important to remember to have a balance in their life.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Respected There are 12 relevant articles of the UNCRC (Rights of the Child) linked to the Nurtured indicator. 2 - Non-discrimination Children and Young People have the right to have the convention that applies to everyone under the age of 18, no matter who they are, whether they are a boy or a girl, what their religion is, whether they have a disability, or what type of family they come from. 3 - Best interests of the child The best interests of the child must be a top priority in all decisions and actions that affect children. Children and Young People have the right to have their interests considered if a decision is being made by any person about them. What is best for them is what matters. 4 – Implementation of the Convention Governments must do all they can to make sure every child can enjoy their rights by creating systems and passing laws that promote and protect children’s rights. Children and Young People have the right to have their rights protected and an environment where they can grow up safe. 5 - Parental guidance and a child’s evolving capacities Every child has the right to be registered at birth, to have a name and nationality, and, as far as possible, to know and be cared for by their parents. Children and Young People have the right to their parents being responsible to guide them through their childhood and help them learn how to use their rights. 8 - Protection and preservation of identity Every child has the right to an identity. Governments must respect and protect that right, and prevent the child’s name, nationality or family relationships from being changed unlawfully. Children and Young People have the right to know who they are – official records should be kept. If they are over 16 years old and adopted, they can try to find out who their birth parents are. 12 - Respect for the views of the child Every child has the right to express their views, feelings and wishes in all matters affecting them, and to have their views considered and taken seriously. This right applies at all times, for example during immigration proceedings, housing decisions or the child’s day-to-day home life. Children and Young People have the right to speak up and have their opinions listened to and be taken seriously by adults on things that affect them.
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Appendix 4 - Version: 7.0 13 - Freedom of expression Every child must be free to express their thoughts and opinions and to access all kinds of information, as long as it is within the law. Children and Young People have the right to say whatever they believe as long as it does not harm or offend other people. They also have the responsibility to respect the rights and freedom of others. 14 - Freedom of thought, belief and religion Every child has the right to think and believe what they choose and also to practise their religion, as long as they are not stopping other people from enjoying their rights. Governments must respect the rights and responsibilities of parents to guide their child as they grow up. Children and Young People have the right to choose their own religion and beliefs. Their parents should help them think about this. 16 - Right to privacy Every child has the right to privacy. The law should protect the child’s private, family and home life, including protecting children from unlawful attacks that harm their reputation, for example, they shouldn’t have their personal letters opened or anyone listening in to their personal phone calls. 17 - Access to information; mass media Every child has the right to reliable information from a variety of sources, and Governments should encourage the media to provide information that children can understand. Governments must help protect children from materials that could harm them. Children and Young People have the right to access information which is important to their wellbeing. Adults should help them find information they are looking for and make sure it’s not harmful. 18 - Parental responsibilities and state assistance Both parents share responsibility for bringing up their child and should always consider what is best for the child. Governments must support parents by creating support services for children and giving parents the help they need to raise their children. 30 - The right to learn and use the language, customs and religion of their family Every child has the right to learn and use the language, customs and religion of their family, whether or not these are shared by the majority of the people in the country where they live.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Responsible There are 5 relevant articles of the UNCRC (Rights of the Child) linked to the Responsible indicator. 3 - Best interests of the child The best interests of the child must be a top priority in all decisions and actions that affect children. Children and Young People have the right to have their interests considered if a decision is being made by any person about them. What is best for them is what matters. 12 - Respect for the views of the child Every child has the right to express their views, feelings and wishes in all matters affecting them, and to have their views considered and taken seriously. This right applies at all times, for example during immigration proceedings, housing decisions or the child’s day-to-day home life. Children and Young People have the right to speak up and have their opinions listened to and be taken seriously by adults on things that affect them. 14 - freedom of thought, conscience and religion Every child has the right to think and believe what they choose and also to practise their religion, as long as they are not stopping other people from enjoying their rights. Governments must respect the rights and responsibilities of parents to guide their child as they grow up. Children and Young People have the right to choose their own religion and beliefs. Their parents should help them think about this. 15 - Freedom of association Every child has the right to meet with other children and to join groups and organisations, as long as this does not stop other people from enjoying their rights. 40 - Juvenile justice A child accused or guilty of breaking the law must be treated with dignity and respect. They have the right to legal assistance and a fair trial that takes account of their age. Governments must set a minimum age for children to be tried in a criminal court and manage a justice system that enables children who have been in conflict with the law to reintegrate into society. Children and Young People have the right to be given legal assistance if they have committed a crime. The Convention also states that they should only be sent to prison if they have committed a serious crime.
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Appendix 4 - Version: 7.0 Wellbeing Indicator – Included There are 5 relevant articles of the UNCRC (Rights of the Child) linked to the Included indicator. 3 - Best interests of the child The best interests of the child must be a top priority in all decisions and actions that affect children. Children and Young People have the right to have their interests considered if a decision is being made by any person about them. What is best for them is what matters. 6 - Life, survival and development Every child has the right to life. Governments must do all they can to ensure that children survive and develop to their full potential. Children and Young People have the right to be kept safe from harm, they have the right to be alive, survive and develop through life. 18 - Parental responsibilities and state assistance Both parents share responsibility for bringing up their child and should always consider what is best for the child. Governments must support parents by creating support services for children and giving parents the help they need to raise their children. 23 - Children with disabilities A child with a disability has the right to live a full and decent life with dignity and, as far as possible, independence and to play an active part in the community. Governments must do all they can to support disabled children and their families. Children and Young People have the right to special help to make sure they can join in with things. 26 - Social security Every child has the right to benefit from social security. Governments must provide social security, including financial support and other benefits, to families in need of assistance. 27 - Adequate standard of living Every child has the right to a standard of living that is good enough to meet their physical and social needs and support their development. Governments must help families who cannot afford to provide this. Children and Young People have the right to a safe place to live, food, clothing and to take part in things they enjoy.