Page last updated at 14:28 GMT, Monday, 29 September 2008 15:28 UK

Tax rise on second homes attacked

House key
The housing market in Scotland is experiencing a downturn

The downturn in the housing market could worsen if the amount of tax paid on second homes is increased, a solicitor has said.

The Scottish Government is consulting on replacing the council tax.

An aspect of its plans is allowing local authorities to charge an extra levy on second homes - a move welcomed by Highland Council.

But Bob Cherry, of solicitors CKD Galbraith, said the letting of such properties helped the economy.

Affordable housing

Mr Cherry said there were far bigger problems to worry about in the housing market at the moment and extra tax would be an unwelcome additional deterrent to potential buyers.

He said: "Owners of second homes do spend a lot of money in the local economies of where they are purchasing and also attract visitors and holiday makers to Scotland.

"So they are fairly vital to the economy and taxes like these will have a negative affect and it's on top of the downturn in the property market."

The potential of doubling of the tax paid on second homes has been welcomed by Highland Council, which would use the money to provide more affordable housing.

Earlier this month, the extent of the housing crisis in the Highlands and Islands was revealed by a study by the Bank of Scotland.

It showed that local house prices were now almost six times higher than average wages.

The same figures showed the average house price across rural Scotland is 13% higher than the average in urban areas.

Previously in the Highlands and Islands, prices were approximately three and a half times greater than average wages.

The study also revealed the Western Isles had seen the greatest rise in rural house prices over the past five years - but remained the least expensive in Scotland.

House prices soaring above wages
15 Sep 08 |  Highlands and Islands
Rural housing 'less affordable'
13 Sep 08 |  Scotland
'Tough' market for rural houses
25 Aug 07 |  Highlands and Islands
Holiday homes tax move welcomed
27 May 08 |  Highlands and Islands


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