Tax relief cut generates millions

The tax relief was reduced on second homes in 2005

A cut in a council tax break on second homes and empty properties in southern Scotland has generated almost £4.8m.

Owners of such buildings used to be entitled to 50% relief on their bills but that was cut to 10% in Dumfries and Galloway and the Borders in 2005.

Hundreds of homes across southern Scotland have seen their council tax increase as a result of the move.

The money generated has to be spent on affordable housing and regeneration projects in the area.

In December 2004 the Scottish Executive agreed to allow local authorities to set the reduction rate between 10% and 50%.

Shortly afterwards, Dumfries and Galloway Council and Scottish Borders Council were among the authorities which agreed to reduce the discount to the minimum level allowed.

FUNDS RAISED IN DUMFRIES AND GALLOWAY AND THE BORDERS 2005/06 £1.42m 2006/07 £1.53m 2007/08 £1.56m 2008/09 £293,000 to date (Dumfries and Galloway only)

Since then, the two authorities have collected about £1.5m-a-year between them under the provisions.

In the Borders, the change has generated little more than £2.1m over a three-year period.

The figure in Dumfries and Galloway was a little higher at almost £2.7m.

Any additional income has to be retained and used to provide affordable social housing.

In Dumfries and Galloway a total of 71 small rural settlements across the region have been identified as areas of particular need.

In addition, it is hoped the funds can be used to fund major housing regeneration schemes in Dumfries and Stranraer.