The Team

Licensing of short-term lets
Licensing of short-term lets

The Scottish Government has introduced new legislation to regulate short-term letting. If you operate a short-term letting business or run an Airbnb style letting operation to let out your property, you will now have to license your business. You must make an application for a license before 1 April 2023.

What types of short-term lets are there?
There are three types of short-term lets:

  • Home sharing: this is where you use all or part of your home for short-term lets whilst you continue to occupy the property;
  • Home letting: this is where you let out all or part of your home for short periods of time whilst you are absent; and
  • Secondary letting: this is where you own other residential property that you let out on a short-term basis but do not live in it yourself. This might be a second home.

If you run a short-term letting business based on any of the above, you need to apply for a license.

Please note, however, that if you rent out a property to someone under a private residential tenancy as their own permanent home, this is not a short-term let and you do not have to apply for a license.

The Scottish Government has provided a checklist you should use to work out whether your business is a short-term letting business. You can find this checklist by clicking here.

Are there any exemptions?

There are exemptions from the legislation in certain circumstances where the occupancy does not constitute a short-term let. Such situations are where the person staying in the property:

  • is related to you
  • is staying to work for you
  • is staying for educational reasons
  • Where the property is “institutional” accommodation or is otherwise regulated.

You can check out if what you do or propose to do is a short-term let by reading through the helpful advice on the Scottish Government’s website by clicking here.

How do I apply for a license?

The Scottish Government has instructed local authorities to introduce a short-term licensing scheme and to have it operational by 1 October 2022. Anyone who runs a short-term letting business at that time has until 1 April 2023 to apply for a license.

When they receive an application, a local authority has up to 12 months to decide whether to grant or refuse a license. That means all current short-term letting businesses and their properties they operate from should be licensed by 1 April 2024.

For those currently running a short-term letting business, if you make an application before 1 April 2023, you can continue to operate your business during the time it takes the local authority to make a decision on your application.

New short-term letting businesses cannot operate after 1 April 2023 unless they hold a license. In addition, each property from which you run a short-term letting business must have its own license.

Whilst the cost of each license has not yet been fixed, it is estimated that the likely costs will be between £214 and £436. Local authorities can decide the fee charging regime. Details of how you can apply for a license can be found by clicking here.

What if the local authority refuses my application?

If the local authority refuses the application, you have a right to appeal to the sheriff court within 28 days of the date the local authority makes the refusal decision. There are various grounds on which the local authority can refuse an application. These are:

  • A person named in the application is disqualified from holding a short-term letting license
  • That the applicant is not considered to be a “fit and proper person”
  • That the property is no suitable for use for short-term lets
  • That those occupying the short-term lets might cause a public nuisance

These are examples of the grounds on which the local authority may base its refusal of a license.

Do I only need a short-term letting license?

Local authorities may require application to apply for planning permission in addition to a short-term letting license. Local authorities can decide to introduce “short-term let control areas”. These are likely to be areas where there are a very high number of short-term lets. You should check with the local authority where the property is located to find out if you need planning permission.

In addition, if you need to make alterations to the property so that it is suitable for letting, you must check if you need a building warrant or planning permission for those alterations.

Where will I find out more information?

The Scottish Government website contains detailed information and guidance on short-term licensing which you can access by clicking here.

If you would like to discuss any aspect of letting, please contact us.