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Business / Short-term let licence fees expected to be ‘relatively low’ compared to other areas

PROPOSED short-term let licence fees in Shetland could end up being at the lower end of the scale compared to other local authorities in Scotland, according to the council.

It comes after some accommodation providers in Shetland said in a recent consultation that they were concerned the extra cost of the newly required licence may mean it is no longer worthwhile for them to rent out properties.

This month local councillors will begin discussing the fees associated with the new national requirement, with the cost of a licence to rent out a secondary home in Shetland potentially sitting at between £189 and £208.

Legislation introduced by the Scottish Government regarding the licensing of short-term lets – such as Airbnb rentals and self-catering cottages – is due to come into force on 1 October this year. More information can be found here.

The new provisions have been put in place to ensure basic safety standards are met across all short-term lets operating in Scotland, and to address concerns of local communities by providing some discretionary powers to licensing authorities.

Locally, Shetland Islands Council’s environmental health team will manage this process. There are exclusions for premises such as hotels and hostels.

Proposals for fees and how the scheme will work in Shetland was due to be heard by the council’s environment and transport committee on Wednesday, with the report set to go to two further meetings this month.

But at Wednesday’s meeting councillors Moraig Lyall and Andrea Manson left the chamber before the agenda item due to a conflict of interests.

This left only stand-in chair Catherine Hughson, Alex Armitage and Arwed Wenger, and a decision was made to delegate the decision on approving the licensing guidance to the SIC’s policy and resources committee next week as there were so few members remaining.

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The report highlights that there has historically been few complaints with short-term lets in Shetland, resulting in a desire for a “relatively light touch approach” locally.

It is estimated that there are a total of approximately 340 properties in Shetland which may require a licence.

Two thirds of which are secondary lets, such as renting out a property which is not the provider’s primary home.

It is also thought that home sharing – where someone takes a room in a house – is also a common arrangement on Shetland particularly during the tourist season and when major events are taking place.

The report says that given a council decision not to undertake inspections of all properties, the level of fees it intends to set is “expected to be relatively low compared to other local authorities and are based on the principle of cost-recovery”.

Generally the intention is that licences will be renewed every three years.

The proposed charges include a £94 licence fee for ‘home sharing’ for properties up to three bedrooms, and £103 for larger homes.

For home letting that rises to £157 and £173, and secondary letting could be £189/£208.

There are also proposed fees for licence renewals and variations. A review of fees and charges is planned for October 2023.

Shetland Islands Council recently undertook a consultation on the national short-term let licensing scheme and comments “revealed a good mixture of opinions, concerns and some anxiety about the proposals”.

But there has been concern from some accommodation providers over the extra costs involved.

“Worries about costs were a consistent feature and many commented that the impact of these new requirements may not make it worthwhile for them to carry on,” a report to councillors added.

There were also concern about the impact on more remote areas, including the North Isles, where there may be “higher costs and lower income”.

Licensing authorities can also accept temporary licences generally for periods of up to six weeks.

The authorities may also grant temporary exemptions and there has been a feeling this could be useful for local events like Up Helly Aa, the Tall Ships and the folk festival.

But the recommendation from environmental health is that temporary exemptions should be made available for home sharing arrangements only as they are considered to be lower risk.

The council will be ready to accept applications from current short–term let operators and hosts from 1 October 2022.

Short-term lets operating before this date will be able to continue taking bookings until their applications are determined as long as they have applied for their licence by 1 April 2023, with a temporary licence number being issued.

From 1 October any new hosts and operators will have to obtain a licence before they can accept any bookings and individuals, letting agencies and other platforms, such as Airbnb and Tourist Associations, will need a valid licence number before these lets can be advertised.

The report on the licensing policy will be heard by the policy and resources committee on 12 September ahead of getting a final airing in front of the full council on 28 September.

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