Final Cabinet Report - ICIA Review
North Ayrshire Council · 8 October 2025
Back to Cabinet — 8 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
NORTH AYRSHIRE COUNCIL 08 October 2025 Special Cabinet Title: Review of Decision relating to Island Community Impact Assessment – 100% Premium Council Tax Charge on Second Homes on Cumbrae Purpose: To seek Cabinet’s determination of the review of the island communities impact assessment relating to the decision to impose a 100% Council Tax premium on second homes on Cumbrae, and the reasons for that determination. Recommendation: That Cabinet decide whether: (a) Further information is required to enable a decision to be made on the review, and, if so, what information is needed and from whom; or (b) The ICIA appended to the 12 February 2025 Council report was sufficient, and no further action is required; or (c) Changes are needed to the ICIA; or (d) A new ICIA requires to be carried out. Thereafter that any relevant statutory notice to reflect the decision of Cabinet is issued within the appropriate timescales. 1. Executive Summary 1.1 The Council has received an application for a review of a decision relating to an island communities impact assessment. Cabinet is asked to determine the review. 1.2 The review application relates to North Ayrshire Council’s decision to implement a 100% Council Tax premium on second homes. The review has been brought on the grounds that the island communities impact assessment completed in relation to the Isle of Cumbrae failed to assess the extent to which the Council considers that the proposal could be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. Specifically, the applicant has stated that a detailed study of the second homes on the island should be undertaken to assess their condition and to consider the viability of works to make them suitable for permanent occupation by working families, followed by a programme of works to upgrade those properties that need it.
Page 2
2. Background 2.1 The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023 (the “2023 Regulations”) came into force on 1 April 2024 and gave local authorities the power to charge a premium of up to 100% of the applicable Council Tax charge for second homes. The North Ayrshire Council noted these additional powers on 14 February 2024, but deferred their adoption pending public consultation on the proposals, including with our island communities. 2.2 On 12 February 2025, following an extensive programme of engagement and consultation with our communities, North Ayrshire Council agreed 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. 2.3 The 100% premium applies to second homes; that is, to dwellings which are no one’s sole or main residence, but which are furnished and lived in for at least 25 days during any period of 12 months. Holiday let properties, which must be available for rent for 140 days per year and actually let at least 70 days per year, are not subject to the 100% premium as they are liable for non-domestic rates rather than Council Tax. Similarly, unoccupied dwellings, which are dwellings which are no one’s sole or main residence, but which do not meet the other criteria to be a second home, are not subject to the premium. There is a mandatory 50% discount for second homes which meet the definitions of purpose-built holiday homes or job-related dwellings, as provided under The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013. As set out at paragraph 2.2 above, North Ayrshire Council has also approved a 50% Council Tax discount for up to 12 months on recently purchased second homes undergoing repairs or renovations. Requirements of the Islands (Scotland) Act 2018 2.4 Under the Islands (Scotland) Act 2018 (the “2018 Act”), the Council has a duty to prepare an island communities impact assessment (“ICIA”) in relation to a policy, strategy or service which, in the Council’s opinion, is likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities) in North Ayrshire. Officers identified that an ICIA was required in relation to the likely impact of the proposed Council Tax premium on second homes in relation to Arran and Cumbrae. A public consultation was carried out on the proposal between 10 October 2024 and 25 November 2024. Full details of the consultation responses were included at Appendix 1 of the report to Council on 12 February 2025. This consultation feedback was used to inform the ICIAs for both Arran and Cumbrae. The completed ICIAs were included at Appendix 2 of the report to Council.
Page 3
2.5 Under section 8(3)(b) of the 2018 Act, an ICIA must “assess the extent to which the authority considers that the policy, strategy or service (as the case may be) can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it.” 2.6 An “island community” is defined in section 2 of the 2018 Act as a community which- (a) consists of two or more individuals, all of whom permanently inhabit an island (whether or not the same island), and (b) is based on common interest, identity or geography (including in relation to any uninhabited island whose natural environment and terrestrial, marine and associated ecosystems contribute to the natural or cultural heritage or economy of an inhabited island). Application for review 2.7 On 9 April 2025, the Council received an application for a review of a decision relating to the ICIA carried out in respect of Cumbrae. The application for review was received on behalf of Cumbrae Community Council which represents the permanent inhabitants of the Isle of Cumbrae. The Island Communities Impact Assessments (Publication and Review of Decisions) (Scotland) Regulations 2020 (the “2020 Regulations”) set out the possible grounds for a review of a decision relating to an ICIA. The 2020 Regulations also provide that an application for review of a decision relating to an ICIA should be made to the authority which made the decision. The application for review that was received by the Council was made on the ground that the applicant considers that the Council, in making its decision, had failed in its duty under section 8(3)(b) of the 2018 Act, set out in bold at paragraph 2.5 above. 2.8 Elected members have been provided with an unredacted copy of the application for review. Redacted copies of all documentation relating to the review are available to view on the Council’s website in accordance with the legislative requirements under the 2020 Regulations: https://www.north-ayrshire.gov.uk/business-licensing/islands- recovery-renewal. 2.9 The specific mitigation which the applicant considers that the Council ought to have assessed, in order to meet its duty under section 8(3)(b) of the 2018 Act as set out above, is set out at section 7 of the application: “To deliver the intended outcome of the policy, first, a detailed study of the second homes on the island should be undertaken to assess their condition and to consider the viability of possible alternative solutions for retrofitting and altering them to make them suitable for permanent occupation by working families. A programme of works will then be required to upgrade those properties that need it.” Written representations 2.10 A notice was published on the Council website as required under the 2020 Regulations, giving notice of the application for review and inviting members of the public to submit written representations.
Page 4
2.11 Between 30 April 2025 and the deadline of 20 May 2025, the Council received 129 written representations in connection with the review. These consisted of 126 in support of the application for review, 1 opposed to the review and 2 that expressed neither support for nor opposition to the review and which are therefore considered to be neutral. Elected members have been provided with unredacted copies of the written representations, with redacted copies available to view on the Council’s website. 2.12 Of the 126 representations supporting the review, 88 indicated that they own a second home on Cumbrae, 10 indicated that they are a permanent resident of Cumbrae, 2 were submitted on behalf of organisations (Millport Golf Club and Carbon Neutral Cumbrae), 2 indicated that they owned businesses on the island (and of these, one confirmed that they are also a permanent island resident), 1 indicated that they grew up in Millport but no longer live there, 1 indicated that they own a holiday let, 3 indicated that they or a family member owned a second home on Arran, and 1 indicated that they own a second home elsewhere in North Ayrshire. 19 did not provide details about their personal circumstances. 2.13 The written representation that was opposed to the review was submitted by an individual who indicated that their partner is a permanent resident on Cumbrae. Of the 2 neutral representations, 1 indicated that they own a second home and 1 did not provide detail about their personal circumstances. 2.14 The majority of those who submitted written representations emphasised the reasons why they believe that the policy will result in negative outcomes for Cumbrae. A summary of the views expressed is included at Appendix 1. Mitigations proposed by those who supported the review 2.15 It was noted by some respondents that the mitigations proposed in the ICIA (to monitor the impact of the tax on an on-going basis, giving consideration to any appropriate steps which may be required to mitigate any unintended consequences that emerge, and to ring-fence 10% of the additional income received to support investment in affordable housing) were not specific to the particular circumstances on Cumbrae. Those who submitted written representations proposed a range of measures which they felt would mitigate the impact of the policy on Cumbrae. These are summarised below: 1. Many echoed the applicant’s proposal that there should be a detailed study of second homes on Cumbrae, followed by a programme of works to upgrade properties to make them suitable for permanent occupation. 2. Some respondents suggested that properties at the lower end of the Council Tax Bands (e.g. properties with a Council Tax Band A or B) should be exempt from the additional charge. 3. Others felt that there should be a more nuanced approach taken to applying exemptions or reductions to the surcharge, as the mix of property types across Council Tax Bands A and B meant that it would not be appropriate to apply a blanket exemption on the basis of Council Tax Band. Instead, suggestions included exempting or reducing the tax for homes which were shown to be unsuitable for permanent habitation, or on the basis of square footage, usage
Page 5
levels, the involvement of home owners in the local community or the contributions made by owners to the local economy. One suggested following the approach taken by Cornwall, Norfolk and Somerset Councils. 4. Some respondents suggested that a lower increase in Council Tax than the 100% surcharge would be appropriate on Cumbrae. 5. Some stated that they felt that the island should be exempt from the additional charge altogether. 6. It was suggested that all additional income raised by the levy on Cumbrae should be allocated to Cumbrae. 7. Some expressed the view that it is unfair that those who rent out their property as a holiday let are exempt from Council Tax. They suggested that Council Tax should be charged on holiday lets, instead of those who use their properties as second homes being required to pay extra. 8. It was also suggested that the Council introduce incentives for renovating properties. 2.16 The written representations were then sent to the applicant for their comment, as required under the 2020 Regulations. An unredacted copy of the comments made by the applicant has been shared with elected members, with the redacted copy available to view on the Council’s website. Response from Officers 2.17 The application, written representations and comments from the applicant were shared with officers in Financial Services and Housing & Public Protection. A copy of the comments made by officers is included at Appendix 2. Further comments from applicant 2.18 The comments provided by officers were shared with the applicant, and the applicant was given a final opportunity to provide any comments thereon. A redacted copy of the further comments made by the applicant is included at Appendix 3. Deciding the review 2.19 The applicant has been invited to address the Special Cabinet. 2.20 Cabinet is now asked to consider the application for review and decide whether or not the Council has discharged its duty to ensure that the ICIA for Cumbrae assesses the extent to which the Council considers that the policy to impose a Council Tax premium on second homes can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. 3. Proposals 3.1 That Cabinet decide whether:
Page 6
(a) Further information is required to enable a decision to be made on the review, and, if so, what information is needed and from whom; or (b) The ICIA appended to the 12 February 2025 Council report was sufficient, and no further action is required; or (c) Changes are needed to the ICIA; or (d) A new ICIA requires to be carried out. 4. Implications/Socio-economic Duty Financial 4.1 Included in the Council report of 12 February 2025, It is estimated that the introduction of the additional Council Tax levy on Second Homes will result in net additional income of £1.305m across North Ayrshire. 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. With specific reference to Cumbrae, net additional Council tax revenue is estimated at £0.3m. This has already been included within the approved Council Budget for 2025/26. Human Resources 4.2 None. Legal 4.3 The Council has powers to impose a premium on Council Tax on Second Homes under the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Amendment Regulations 2023. The Council is under a legal duty to ensure that the ICIA on the proposal to impose the premium assesses the extent to which the Council considers that the proposal can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. The applicant has applied for a review of the decision under the statutory review process set out in the Islands (Scotland) Act 2018 and The Island Communities Impact Assessments (Publication and Review of Decisions) (Scotland) Regulations 2020. Equality/Socio-economic 4.4 None. Climate Change and Carbon 4.5 None. Key Priorities 4.6 None.
Page 7
Community Wealth Building 4.7 None. Islands Communities Impact Assessment (ICIA) 4.8 Cabinet is asked to determine whether the ICIA carried out in respect of the impact of the imposition of a Council Tax Premium on Second Homes on Cumbrae was sufficient to comply with the Council’s legislative duties. United Nations Rights of the Child (UNCRC) 4.9 None. Consumer Duty 4.10 None. 5. Consultation 5.1 The original decision which is the subject of the review application was informed by a detailed public consultation undertaken in 2024 across citizens, community and stakeholder groups. As part of the statutory review process, members of the public have had the opportunity to submit written representations in connection with the review. Aileen Craig Head of Service (Democratic Services) For further information please contact Raymond Lynch, Senior Manager (Legal Services), on Microsoft Teams. Background Papers 0
Page 8
Appendix 1 – Concerns raised in written representations about the impact of the policy on Cumbrae 1. Many respondents expressed the view that most of the properties affected by the council tax premium are not suitable for permanent occupation (particularly by working families) due to their small size and the difficulty and expense of heating them. 2. Concerns were raised that the economy on Cumbrae would be negatively impacted if second home owners were to leave the island. 3. Many respondents expressed the view that the tax would negatively impact the local economy because second home owners would have less disposable income available to spend on the island. 4. Many respondents emphasised that second home owners on Cumbrae are more active in the local community compared to second home owners elsewhere. 5. Some respondents anticipated that the condition of properties on the island would deteriorate due to the increased council tax costs. 6. Some noted that many second homes on Cumbrae have been handed down through generations of families, with others indicating that most of the second home owners on Cumbrae are not wealthy, and may not be able to afford the additional tax. 7. It was emphasised by some that second home owners have a longer season than other tourists, and therefore make a greater contribution to the local economy throughout the year. 8. Some responses highlighted concerns that there are insufficient employment opportunities on the island to support higher levels of permanent occupation. 9. Concerns were also expressed that the infrastructure on the island could not support higher levels of permanent occupation. Similarly, it was noted that the rising cost of ferries combined with the additional Council Tax charge could have a negative impact. 10. Some highlighted that the policy would have a greater impact on the island than on the mainland and/or than Arran due to Cumbrae having a higher proportion of second homes. 11. Several responses noted specific concerns about the impact of the proposal on the Golf Club and/or the Bowling Club, on the basis that a large portion of the membership of those clubs are comprised of second home owners. A representation was submitted on behalf of Millport Golf Club which emphasised these concerns, noting that only 25% of members are permanent island residents, and setting out the community benefits provided by the Club. 12. Some respondents expressed the view that the council tax premium would have the effect of lowering house prices on the island, with some noting that they felt that there was low demand for housing. Conversely, one respondent felt that house prices were more likely to increase, as Millport is becoming a desirable destination and demand for homes would therefore be high. 13. Concerns were expressed by some that if second homes were to be converted to holiday lets in response to the premium then this would have a negative impact on the local community. 14. Some respondents were of the view that Cumbrae needs more Council houses, sheltered housing or care home provision, rather than the housing that would be made available if second homes were to be sold.
Page 9
15. A few respondents expressed their concern that the policy objective of more available housing could be easily circumvented by, for example, converting a second home to a holiday let or transferring it to the ownership of a limited company. 16. The concern was expressed that if second homes were converted to permanent residences without suitable retrofitting then this would lead to a risk of rising fuel poverty. 17. Some stated that the demographics of those who would be likely to move into affected properties on a permanent basis means that they would be unlikely to be liable for Council Tax (for example, due to being in receipt of benefits) and that this would therefore result in a loss of tax revenue to the Council. 18. Some representations emphasised that second home ownership can be a stepping stone to moving to the island on a permanent basis. 19. One respondent expressed the view that there is sufficient demand for second homes on Cumbrae that many people are unlikely to be motivated to sell their properties, and that having the option to rent out a second home when not in use could offset the additional cost to second homeowners and bring additional income to the island.
Page 10
Appendix 2 – Council Officer comments on the application, written representations and applicant’s comments Comments from Mark Boyd. Head of Finance General Background / Context On 14 February 2024 North Ayrshire Council approved a report to undertake a consultation on the proposal to implement an increased Council Tax charge on second homes in North Ayrshire, ensuring that the island communities on the Isles of Arran and Cumbrae are given a platform to voice their opinions, concerns and suggestions. The Council subsequently undertook an extensive programme of community engagement that ran from 10 October 2024 to 25 November 2024. All feedback was gathered and reported to Council in advance of the Council’s Budget setting which took place on 26 February 2025. The feedback was included in a report which was presented to North Ayrshire Council on 12 February 2025. The report asked Council to consider the application of a 100% premium on Council Tax for Second Homes and for this to come into effect on 1 April 2025. The report was supported by a suite of additional information for elected members to consider, including:- • North Ayrshire Council Community Engagement / Consultation feedback for the proposed implementation of a Council tax premium on second homes and feedback from a general survey on taxes and levies. • An Island Community Impact Assessment for the Island of Arran. • An Island Community Impact Assessment for the Isle of Cumbrae. • Anticipated Income forecasts for the Council in respect of Second Home Council tax premiums, and • Completed Equality and Children’s Rights Impact Assessment. North Ayrshire Council considered the report and supporting information and approved the application of the 100% premium with effect from 1 April 2025. Supporting Commentary in Response to the Application for Review of the Decision Relating to the Islands Community Impact Assessment Noted Grounds for the Review – The applicant considers that the relevant authority, in making its decision, has failed to assess the extent to which the relevant authority considers that the policy, strategy or service (as the case may be) can be developed or delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from it. Statement of Reasons – The following section includes details of the statement of reasons included within the application. For ease of reference supporting text has been included in red that represents commentary from the Head of Finance for consideration.
Page 11
North Ayrshire Council prepared an Island Communities Impact Assessment (ICIA) for the Isle of Cumbrae (dated 18 January 2025), in relation to the proposed introduction of a 100% premium Council Tax charge on second homes from 1 April 2025. The ICIA was only published in the Agenda Document Pack for the Council meeting on 12 February 2025 at which the policy was approved. Council Tax bills which included the new premium were subsequently sent to second home owners dated 6 March 2025. It is clear therefore that the policy was approved and implemented before the expiry of the three month statutory review period required by The Island Communities Impact Assessments (Publication and Review of Decisions) (Scotland) Regulations 2020. This did not allow for the possibility that applicants would call for a review of the ICIA that could result in changes to the policy. The ICIA was included in the report to North Ayrshire Council on 12 February 2025. The report also included feedback from the extensive community engagement programme undertaken by the Council between 10 October 2024 to 25 November 2024. It is important that all the information was made available to elected members in advance of the Council’s Budget Setting meeting held on 26 February 2025. This was vital due to the potential financial implications to the Council for the decision that was considered on 12 February 2025. In terms of the reference to the three month statutory review period, an application for review of a decision relating to an ICIA must be made within the period of 3 months beginning with the publication date of the decision regarding an ICIA, be in the appropriate form, and contain the relevant information. The Council has six months to make a decision on the application for review. The applicant will be issued with a notification of the decision, and the decision will be published. This process does not preclude the Council implementing any policy within this period. In addition, North Ayrshire Council failed to properly assess the extent to which to the introduction of the policy could be developed or delivered in such a manner as to improve or mitigate the outcomes resulting from it for the Isle of Cumbrae. This failure relates in particular to two aspects of the ICIA: Firstly, the ICIA recognises that the policy is likely to have a far greater impact on Cumbrae than on the mainland. 30% of all North Ayrshire’s second homes are located on the Cumbrae, which has a population of just 1,262. 37% North Ayrshire’s second homes are located on the mainland, which has a population of 133,413. This means the impact per capita is 74 times higher on Cumbrae than on the mainland. The council tax premium charged on Cumbrae as a result of the policy is estimated, based on figures within the ICIA, to be £500,589. Given that the island has a total economic output of just £12.9 million (compared to an economic output for North Ayrshire as whole of approximately £2.4 billion) this is a very significant and disproportionate impact. The ICIA states “This policy would be applied across all North Ayrshire and it is intended to have the same impact across the whole area… It is recognised however that the impact of such a change could be proportionately greater across the island communities.”
Page 12
Despite identifying the disproportionate impact of the policy on Cumbrae, North Ayrshire Council failed to develop or deliver the policy in such a manner as to improve or mitigate the outcomes resulting from it for Cumbrae. The only mitigation proposed is that 10% of the additional income received is ringfenced to support investment in affordable housing, but this is for North Ayrshire as a whole, it is not targeted specifically at Cumbrae. Other than that, the ICIA simply proposes monitoring to assess the impact of the policy after it has been introduced, stating: “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.” From the completed ICIA in respect of the Isle of Cumbrae it is important to consider the policy intent from the application of the Council tax premium for second homes. 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. Due to the proportionate number of second homes on the island, the ICIA recognises the potentially disproportionate level of impact on Cumbrae when compared to the mainland. This would be through a modal shift from second home occupancy of at least 25 days per annum to potentially greater 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. 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. It is important to monitor the extent of any shift in ownership models. Secondly, NAC state in the Executive Summary of the Agenda Document Pack for the meeting on 12 February that the policy will; “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.” However, the ICIA identifies that unlike the rest of North Ayrshire, 76% of the second homes on Cumbrae are council tax band A and B properties (compared with just 37% on the mainland). Many of these properties are small one- or two-bedroom tenement flats built in the 19th century. Whilst they are adequate for temporary occupation as second homes in the warmer months, many are unsuited to full-time occupancy and are not large enough to provide homes for working families. They tend to be small and expensive to heat to a comfortable level in the winter. The ICIA states: “…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…… 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.” The ICIA identifies therefore that the policy may fail to deliver its intended outcome on Cumbrae. Despite this, NAC did not consider how it could be developed or delivered to improve or mitigate its outcomes for Cumbrae. It simply proposes that, after introduction of the policy, NAC will monitor: “….the number of second homes retained, the number of homes
Page 13
sold or rented, and the number of homes changed to holiday lets, along with external support to help monitor house prices on the islands”. The ICIA recognises 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, the premium element of council tax is lower for lower banded properties. For context, the premium would result in an additional annual cost of £1,036 for a Band A and £1,208 for a Band B. This equates to an additional £86 per month for Band A and £101 per month for Band B. 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. Included within the written representations to support the ICIA review was reference to certain English local authorities (namely Cornwall, Norfolk and Somerset Councils) who it claims, have adopted a more nuanced approach to council tax premiums on second homes. On further examination across each of these local authorities, I can confirm that the Council tax premiums in place from 1st April 2025 are consistent with the policy now being applied in North Ayrshire i.e. 100% premium has been applied. I cannot see reference to any further nuanced approach to charges based on occupancy levels, condition etc. I can only deduce that this is possibly something that was historically in place? In terms of North Ayrshire Council considering a more nuanced approach to a policy, I would comment that when you consider an occupancy based approach, it is recognised that there is already a policy that considers occupancy levels i.e. between the current 3 occupancy-based classifications across permanent residences, holiday lets and second homes. I would also comment that the current Council tax banding ensures that any % based premium increase is proportionately applied based on the historic value of the property. Statement Demonstrating Direct Effect – The following section includes an extract from the Statement Demonstrating Direct Effect included within the application. For ease of reference supporting text has been included in red that represents commentary from the Head of Finance for consideration. To deliver the intended outcome of the policy, first, a detailed study of the second homes on the island should be undertaken to assess their condition and to consider the viability of
Page 14
possible alternative solutions for retrofitting and altering them to make them suitable for permanent occupation by working families. A programme of works will then be required to upgrade those properties that need it. Without these actions, the policy will have a substantial negative impact on the island, reducing income and leaving vacant properties, but it will fail to deliver the positive outcomes that were intended. The Council undertook extensive consultation 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. There were 398 responses to the Taxes and Levies survey, which included questions on the proposed 100% premium, and 507 responses to the more targeted survey on the proposal. None of the consultation responses proposed the mitigation measure which has now been put forward by the applicant. Comments from Housing & Protective Services: Given the type, age, location and condition of many of the properties which are likely to be second homes, it is probable that most, if not all, will require some form of maintenance, repair or remedial work, notwithstanding any additional work required to comply with current standards for homes to be rented or sold. Undertaking an assessment of properties in private ownership would require agreement from the owners who are unlikely to do so without being compelled by legislation. I am not aware of any legislation that could be used for this specific purpose. If it were legally possible the council do not have the resource to carry out this type of work, which would be a significant undertaking. The following demand information has been pulled in relation to Housing applications for Cumbrae (June 2025):
Page 15
Appendix 3 – Further Comments by the Applicant From: Redacted Sent: 31 August 2025 09:52 To: Redacted Cc: Redacted Subject: ICIA consultation response from Redacted Dear Redacted Thank you for sending us the feedback you received from North Ayrshire Council’s Finance and Housing & Protective Services departments on the issues we raised in calling for a review of the Island Community Impact Assessment (ICIA) for Cumbrae in relation to the Council Tax premium for second homes. The feedback you have provided fails to address the main reason that Redacted applied for the review, which for clarity we have restated below in bold. The ICIA identified clear negative effects of the policy on Cumbrae’s community, which are significantly different from its effect on other communities. Under such circumstances, the Islands (Scotland) Act 2018 requires that the ICIA assesses the extent to which the policy can be developed or delivered in such a manner as to improve or mitigate, for Cumbrae, the outcomes resulting from it. The ICIA did not do this, a clear breach of North Ayrshire Council’s obligations under the Act. The failure of the feedback to address this point is a clear illustration of why North Ayrshire Council should not be permitted to review its own impact assessment. It is our strong opinion that the Islands Act should be amended to ensure that such reviews are undertaken by independent bodies. We have copied this email to the Cabinet Secretary for Rural Affairs, Land Reform and Islands to make them aware of this problem with the Islands Act, and to ask for provide proper oversight of your review, which we trust will address the failure of the ICIA to meet your obligations under the Act. We have also attached a copy of our original application for the review for the Cabinet Secretary’s information. We would be grateful if you could tell us when this matter will be referred to North Ayrshire Council Cabinet for a decision, what information that decision will be based on and whether we will be permitted to make representations. Kind regards, Redacted