Scottish Government announces licensing scheme for Airbnbs

The new measures are expected to come into effect from spring 2021

Councils are to be given new powers to control Airbnb-style short-term lets, the Scottish Government has announced.

Local Government Minister Kevin Stewart told MSPs a new licensing scheme would be introduced, control zones would be created and the tax treatment of short-term lets would be reviewed.

The move was immediately welcomed by Edinburgh council chiefs as giving them the powers they needed to tackle an issue which has been a long-running concern in the Capital.

Mr Stewart said there would be wide consultation on the measures, which are expected to come into force in spring 2021.

He said the government wanted local authorities to be empowered to balance the needs of their communities with wider economic and tourism interests.

“There has been a dramatic rise in the number of short-term lets in Scotland over the last few years. A substantial part of the growth is in whole-property rentals and this has caused concern in some areas of Scotland about the impact on local communities and the availability of housing for permanent residents.”

But he said short-term lets were an important source of flexible accommodation for tourists and workers and helped support the growth of Scotland’s tourism industry.

Mr Stewart said the government had received over 1,000 responses to its consultation on the issue and consultation events had been held with residents, businesses, guests, hosts, platforms and local authorities.

He said the licensing scheme for short-term lets would help councils to know what was happening in their area, improve safety and handle complaints effectively.

Safety requirements would be a mandatory condition on licences, but councils would have discretion to impose additional conditions, for example on littering or overcrowding of properties.

And councils would also be able to charge a fee for administering the scheme and enforcing it.

He said the government would give local authorities the power to introduce short-term let control areas, covering the whole or part of their area, where change of use to whole-property lets would require planning permission.

“Renting a room in your own home or allowing others to stay in your own home while you’re on holiday does not take homes away from residents or cause the same issues as whole-property short-term lets and they will not be affected by the control areas.”

'Robust but proportionate and fair'

Mr Stewart said the tax review was to ensure short-term lets made an appropriate contribution to the communities they operated in and support local services.

He described the proposals as “robust but proportionate and fair”. “These measures allow us to make progress to address a pressing issue for some of our communities but they will not unduly curtail the benefits of short term lets to hosts, visitors and the Scottish economy.”

And he said the government would monitor the measures at every stage to make sure they were effective and avoided unintended consequences.

Lothian Green MSP Andy Wightman, who has spoken out forcefully on the issue of short-term lets in the Capital, said: “I am pleased that the Minister has finally acted on my long term campaign.

“Those communities who have been adversely impacted by short term lets will be pleased the government has now committed to introducing a much-needed, long overdue licensing scheme by 2021.”

Edinburgh council leader Adam McVey said he was pleased the authority’s call for new legislation had been successful.

He said: “This is extremely welcome news and will give us the controls that we need over short term lets for our residents and communities across Edinburgh.

“The announcement by the Minister meets our request for mandatory licenses and we will now be in a position to more effectively implement planning controls to stop the increase of short term lets.

“A review of taxation of short term lets will also make sure that businesses are paying properly for income they’re receiving and local services they’re using.”

Scottish Conservative housing spokesman Graham Simpson said regulation was needed but there were too few details on how it would work.

“We don’t even know if councils will be able to refuse licences or on what grounds.”

And he claimed: “There is a danger that we could have a triple tax whammy on tourism if the SNP introduces an Airbnb tax on top of a tourist tax and a fee for licences.”

Lothian Labour MSP Sarah Boyack said platforms like Airbnb allowed people to make use of their properties and gave visitors additional options, but the lack of regulation had led to anti-social behaviour and the loss of much-needed homes.

“There is a big issue in Edinburgh which has spiralled out of control, so we urgently need local councils to have the power to regulate locally.”

She welcomed the licensing powers but raised concerns about the control areas. “It sounds very much like Rent Pressure Zones, which have failed.”

She said councils needed the power to control the scale and density of short-term lets and to cap the number in their area.

Housing charity Shelter said Airbnb-style short-term lets helped make Scotland an attractive place to visit, but their unregulated growth meant people being locked out of homes that could be let privately to help tackle Scotland’s housing emergency.

Welcome first step

Shelter Scotland director Graeme Brown said the measures were a welcome first step. “The test will be if communities in places like Edinburgh see real change and real opportunities to find the homes they need.”

Airbnb said it wanted to clarify how the cost of licensing would impact on families who let out spare bedrooms or their main property and are less able to absorb additional costs.

But an Airbnb spokesman said: “We have long supported calls for fair regulations. Now we want to work with the Scottish Government and local authorities on clear and simple guidance for hosts.

"Together we can help locals share their homes and follow the rules, and avoid a system that excludes working families through fees, barriers and bureaucracy. Our platform is an economic lifeline for countless local families and travel on Airbnb boosts the Scottish economy by almost £2 million a day.”