HUNDREDS of homeowners who rent out their homes for the Edinburgh festivals face a tax clampdown under an MSP's plans.
Andy Wightman MSP claims that as the Scottish capital's population doubles as stars, their entourages, production firms and festival-goers embed themselves for the duration, £10.6 million of taxes are being avoided this year due to the boom in private homes being let out as holiday accommodation.
For the month of august, artists and performers such as comedians Ruby Wax, below, and Craig Ferguson settle in for thousands of shows across the city.
Properties vary in price from £500 a night for a three bedroom short-term let in Howe Street to £8,000 for the month for a three bedroom flat in Danube Street.
It is unclear how many homes are let out during the month in the city but is done across a number of agencies and is thought run into the hundreds.
The Lothian Green MSP has been inundated with correspondence from constituents concerned about the loss of housing supply and an increase in anti-social behaviour.
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He earlier warned that on current trends half the homes in the EH1 postcode will be holiday lets within a generation.
Mr Wightman, below, said: "It is disappointing that the Scottish Government has not conducted an economic impact assessment of the Small Business Bonus Scheme in the ten years of its existence.
"There is no justification for short-term lets being exempted from paying £10.6 million in taxes to help meet the considerable costs of public services in Edinburgh.
"Thanks to this scheme and the failure to declare properties as short-term lets, landlords, many of whom are overseas investors, profit from these services without contributing a penny.
"I have been inundated by constituents concerned that the growth of holiday lets is causing more anti-social behaviour and denies people access to good quality housing for long term rent. It is time to bring short-term lets under fully into the planning system and give the Council the powers to protect the availability of residential accommodation for the citizens of the city."
Mr Wightman said his analysis puts the problem into perspective, and if a property is let for more than 140 days it becomes liable for non-domestic rates rather than council tax but "only half of all such properties are declared".
He said that if a property has a rateable value of less than £15,000, the Scottish Government provides 100 per cent relief under the Small Business Bonus Scheme, and that 83 per cent of short-term lets in Edinburgh that are declared for non-domestic rates have a rateable value below £15,000 and therefore don't pay non-domestic rates.
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He calculated that if all short-term lets over 140 days per year paying non-domestic rates, this would generate £10.6million in additional tax revenue.
Stuart Montgomery, managing director of Edinburgh Festival Rentals, which is part of Rettie and Co, said the firm's wider interests are rooted in supporting the long-term market, but that there is a legitimate short-term market directly connected to the operation of the festivals.
He said: "The Edinburgh festivals properties that we let and operate really focus on longer term stays.
"Our market is the industry and production companies coming up from London.
"That is kind of the niche we have gone out to service."
He added: "We have clients who do both and are supportive of that but what we try and do is focus on the longer term bookings.”
A Scottish Government spokesperson said: “Since its introduction, the Small Business Bonus Scheme has saved businesses around £1.3 billion.
“We are aware of the position regarding holiday lets and have published research on the supply and demand for short-term lets.
"The research was commissioned to inform the work of our Expert Advisory Panel on the Collaborative Economy who are due to report to Ministers by the end of the year.
“The Barclay review of non-domestic rates will report this month and we have committed to respond swiftly.”
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