Tax derelict land to tackle housing crisis, finds Scottish Greens report

Tax derelict land to tackle housing crisis, finds Scottish Greens report
Scottish Housing News


Giving local councils the power to tax the 20,000 football pitches’ worth of vacant and derelict land in Scotland could generate £200 million a year to build affordable homes and tackle the housing crisis, according to research by the Scottish Greens.


The report published today by Andy Wightman MSP reveals that nearly 13,000 hectares of land in communities across Scotland currently lies vacant and derelict, of which 69% (around 9,000 hectares) could be developed.


There are almost 4,000 derelict sites in Scotland, including 782 in Glasgow, 487 in North Lanarkshire, 281 in North Ayrshire, 235 in South Lanarkshire and 223 in Fife.


In Edinburgh, where house prices are the highest of any Scottish city, there are 76 derelict sites with a further 157 throughout East, West and Midlothian.


Case studies


Leith Waterfront, Edinburgh


Edinburgh has a housing problem. House prices are the highest of any Scottish city and predicted to increase by 23% by 2021, almost double the UK average growth.


At the Waterfront in Edinburgh lie large swathes of land intended to have had many new homes built on it by now. The financial crash in 2008 however forced developers to put plans on hold due to the collapse in the property market.


Today, much of that land still lies unused, some of it owned in tax havens such as the British Virgin Islands and is not liable for any local property taxes. As this land is not being developed it is no longer an effective part of the city’s housing land supply, forcing new housing developments to be located on land in Edinburgh’s greenbelt. This land could provide as site for essential affordable and social housing to help address the city’s housing crisis.


120-130 Morrison Street, Glasgow


In November 2011 a devastating fire destroyed much of the derelict property known as the Gusset Building in central Glasgow. It had previously housed offices and warehouses of the Scottish Co-operative Wholesale Society and was purchased for £4.2m four years previously by a property development firm.


At the time of the fire no work to develop the property had occurred and the firm was exempt from paying non-domestic rates on their investment because it was classed as an empty industrial property.


Over 100 firefighters attended the blaze and successfully put out the fire. Fire and Rescue is a public service paid for by local residents’ Council Tax and businesses’ NDR payments. As the building was derelict, the owners of the Gusset Building were exempt from property taxes and therefore made no contribution towards Glasgow’s fire and rescues service. Yet in 2011/12 Strathclyde Fire and Rescue itself paid over £2m in non-domestic rates.


Exempting derelict property from paying property taxes deprives our public services of essential funding, forcing the taxpayer to pick up the bill for protecting investors’ property.


Mr Wightman, who is the party’s housing and land reform spokesperson, highlighted a Vacant Site Levy recently created in Ireland, which will see local councils levy charges from next year.


He said that attempts by the party’s MSPs in January 2016 to amend the Land Reform Bill so that Scotland’s vacant and derelict land would be brought into the non-domestic rates system were rejected by the Scottish Government who at the time said they would consult on the proposal but have not yet done so.


Bringing such sites into the non-domestic rates system could raise cash to build affordable homes and tackle the housing crisis, he added.


Mr Wightman said: “Over half of Scotland’s most deprived communities are within 500 metres of vacant and derelict land so there is huge potential to develop and regenerate where it is most needed, and ease the pressure to build on green spaces valued by communities. The Scottish Government, in rejecting bolder Land Reform legislation last year, promised to consult on the taxation of derelict and vacant land and I hope this paper brings that forward.


“Given the lack of affordable housing and continuing financial pressures on public services, it’s unacceptable that landowners can profit from withholding land suitable for housing. There is growing political consensus in Scotland that we need big changes to tackle the housing crisis, so let’s not be timid when it comes to giving local councils the power to tax vacant and derelict land.”