As first proposed in September (2022), the Scottish Government released a statement introducing short-term letting licences to new and existing hosts. Their aim is to balance the rising concern of safety to the local properties and respect the local communities with licenced hosts that adhere to the new terms.
Under the Licensing Order, local authorities in Scotland will have to establish a territory-specific licensing scheme to regulate the process in each area of the country. Existing short-term lets owners will have until 1st October 2023 (previously 1st April 2023) to apply for a licence and all short-term properties will need to have been granted one by 1st January 2025 to continue hosting their property.
Learn all about the new licensing requirements and how the new short-term lets licensing scheme in Scotland impacts you.
Table of Contents
- What is the short-term let legislation in Scotland?
- What is the purpose of the new licensing scheme in Scotland?
- Who is the short-term lets licensing scheme for?
- What are the temporary exemptions and how are they granted?
- What are the temporary licences and how are they issued?
- How to comply with the new short-term lets legislation in Scotland?
- What are the timelines for the new licensing scheme in Scotland?
- Why was the short-term lets licencing application deadline extended?
- Do you need planning permission for short-term lets in Edinburgh?
- Need help? Contact us
What is the short-term let legislation in Scotland in 2022?
The legal requirements for short-term lets in Scotland have changed in 2022. A licence is now needed to operate, and owners must comply with the new legislation. Local authorities are granted regulatory permissions to verify the accommodations’ safety for guests and to ensure the well-being of the local community.
The aim of this law follows the same premises as seen in other European countries: restrict the growing number of short-term lets without safety and quality control, especially in areas where they are affecting the local balance and the availability of housing.
This works as a guarantee of housing quality and protects both guests and owners from other issues. The government is now seeking to support local authorities to ensure that properties are meeting society’s needs. This includes refraining from having substandard short-lets and promoting a bigger number of residential properties that respect important safety guidelines.
This measure will filter the number of short-term lets operating in Scotland, which will result in higher nightly rates/occupancy as demand will outstrip supply. It will create a positive outcome for many owners.
Four licensing options are currently available in Scotland:
- Secondary letting – letting an accommodation that isn’t a principal home;
- Home letting – letting the principal home when vacant;
- Home sharing – letting part of the principal home when vacant
- Home letting and home sharing – a mix of option 2 and 3
The new licensing scheme applies to these 4 categories and foresees new safety requirements, covering the wide range of properties that will be operating as short-term lets in Scotland. The accommodations will be verified to be sure to answer some specific criteria before being held a licence.
What is the purpose of the new licensing scheme in Scotland?
The licensing scheme introduced by the Scottish Government wants to ensure short-term lets are safe and promote a better management of the issues created by this line of business, paying particular attention to its impact on the local communities.
The licensing scheme process empowers local authorities, making them responsible for assessing concerns and handling any related complaints in their area. In many ways, this new short-term regulation in Scotland aims to make sure that the economic benefits from this business and the needs of local communities are well balanced, protecting people from poor quality housing as well.
Who is the short-term lets licensing scheme for?
The new licensing scheme will apply to all residential accommodations operating as short-term lets (excluding privately rented properties used as permanent homes, hotels, hostels, care homes, worker accommodation, among others). This scheme applies to the whole of Scotland and will be implemented by the 32 local authorities.
Some examples of what are considered to be residential short-term lets:
- B&Bs and guesthouses
- Cottages and farmhouses
- Holiday caravans and glamping
- Self-catered properties/holiday lets
- Serviced apartments (up to 4 in the same building)
- Shared rooms or shared house
- Tents / tipis
What are the temporary exemptions and how are they granted?
The temporary exemptions from the requirement to have a licence are granted by the local licensing authority to short-term lets whenever exceptional circumstances are in place. To get a temporary exemption, you need to apply for it and meet specific criteria.
It can be granted for a single continuous period (not exceeding 6 weeks in every 12 months) to allow, for instance, to accommodate a large number of visitors over a short period (during music or art festivals, sports events, major conferences…).
Even when this exemption is granted, it is temporary and it does not affect the way rules apply. The short-term accommodations still have to respect those standard regulations.
What are the temporary licences and how are they issued?
Licensing authorities can issue temporary licences that can last for up to six weeks. It can last longer if you have already applied for a full-time licence.
In that case, your temporary licence will last until your licence application is finally determined. You will be given a temporary licence number but all the mandatory conditions and requirements still apply.
How to comply with the new short-term lets legislation in Scotland?
All short-term lets in Scotland need to follow mandatory requirements that are linked to the safety of the activity. It’s important to confirm whether the property meets the short-term let licensing standards required by law and this can be checked here in detail.
Every short-term let application also requires consultation with:
- Police Scotland
- The Scottish Fire and Rescue Service
- The council’s Environmental Health Service
- Planning and Building Standards departments
Property management companies can be very helpful in this process. GuestReady’s experience in property management means that none of these elements are overlooked. Not only do their teams take the time-consuming work out of your hands, but they also ensure that you don’t miss anything and that you stay up to date when it comes to compliance with newly enacted legislation.
What are the timelines for the new licensing scheme in Scotland?
Stay on track and check out the important dates and deadlines that apply to the new legislation:
Why was the short-let licencing application deadline extended?
The Scottish Government planned to enforce licences for all new and existing short-term lets hosts by the 1st July 2024. The current economic crisis that all hosts and business face is the grounds for the one-off six month extension.
The extension gives the ministers more time to review the legislation and allows hosts to continue generating a source of income to battle these times, without taking away from the aim of the licences – to maintain safety standard for residence and local communities.
This means owners can continue hosting their property until the 30th September 2023, without a licence.
Do you need planning permission for short-term lets in Edinburgh?
The Scottish capital faces stricter rules. Edinburgh Council has announced that the entire city is now included in the short-term let control area that was approved by the Planning Committee on 23 February 2022.
This means that all owners that rent out an entire property in Edinburgh that is not their primary residence, will need to apply for planning permission.
Some nuances apply: in case you have been renting your property for at least ten years, you can apply for a certificate of lawfulness and dodge this application. If you are hosting in your primary home, however, this “planning permission” rule does not apply and you can continue business as usual.
Learn more about the licensing scheme in Scotland with GuestReady
GuestReady has years of experience working with short-term lets management. We know how to take care of your property and how to comply with regulatory requirements. If you are looking to obtain a short-term let licence in Scotland, just leave us a message. We will call you back and help you through the process.
In addition to management and investment services, GuestReady also offers an exclusive direct booking website for its owners and ensures excellent visibility with the publication of ads on the main online rental platforms.