New short-term lets legislation comes into force in 2022

Following much discussion in recent years about the impact of short-term lets in certain areas of the country, most notably Edinburgh, the Scottish Government has introduced new legislation to deal with these Airbnb style letting businesses.

From October 2022, all short-term lets in Scotland are to be regulated. This means that anyone operating a short-term letting business will need to hold a licence for each property they are letting on this basis. This legislation applies to short-term lets only. Private residential tenancies are covered in other legislation that is already in force.

What kind of lets are short-term lets?

The legislation prescribes three types of short-term lets. These are:

·       Home sharing – where all or part of your home is used for short-term lets whilst you are living there;

·       Home Letting – where you use all or part of your own home for a short-term let whilst you are absent. An example of this might be if you let out your house whilst you are on holiday; and

·       Secondary Letting – where you let out a residential property which you do not normally live in. This could be a second home that you own or other residential property you own specifically for letting.

If you are already involved in providing these types of short-term lets or are planning to provide them, you will need to apply for a licence.

To help you work out if what you are providing is a short-term let, you can go through this useful checklist the Scottish Government has made available.

How do I apply for a licence?

You will need to apply to the local authority in the area the property is located. The new scheme for registration and licensing of short-term lets will operate from 1 October 2022. Once the scheme goes live, if you are operating a short-term let at that time, you will have until 1 April 2023 to apply for a licence.

After you have applied for a licence, the local authority will have up to 12 months to reach a decision on whether or not to grant one. If you operate a short-term letting business prior to 1 October 2022, you can continue to operate it whilst awaiting the local authority’s decision. If you have not yet started operating a short-term letting business by that date, you must not offer this service until after you have received a licence.

The Scottish Government aims to have all short-term lets in Scotland regulated by 1 April 2024.

Will I need any other permissions to operate a short-term letting business?

In addition to applying for a short-term lets licence, in some areas, planning permission will also be needed. Local authorities have the option to designate areas as “short-term control areas” where there may, for instance, be a large number of holiday lets. The local authorities for these areas may wish to exercise additional controls. These might be for the protection of the local community or to require the operator to carry out alterations before the short-term lets can commence.

That means in addition to applying for a short-term lets license, you will also need to apply for planning permission.

Where can I find out more information?

You can find out more about short-term lets on the Scottish Government’s website. Please click here for a comprehensive guide to short-term lets.