Scotland losing ‘substantial revenue’ over derelict land

Scotland is losing out on “substantial revenue” by under-taxing owners of vacant and derelict land, according to new research by a prominent land reform campaigner.

Research conducted by Andy Wightman MSP shows that 2,199 non-domestic properties were deemed derelict or vacant by the Scottish Assessors Association (SAA) in 2020, with a combined rateable value (RV) of £12,697,970.

Some 624 of these sites – more than a quarter – were in Glasgow. However, they were given a collective RV of just £8,500. This is less than 0.07 per cent of the total taxable value of all Scotland’s derelict land and an average of £14 per site.

Local authority	Number of vacant/derelict land entries	Total rateable value	Average rateable value per site
Glasgow City Council	624	£8,500	£14
Fife Council	171	£1,997,260	£11,680
Stirling Council	153	£305,920	£1,999
City of Edinburgh Council	144	£5,535,125	£38,438
Falkirk Council	135	£740,545	£5,486
Renfrewshire Council	98	£9,730	£99
North Lanarkshire Council	98	£9,800	£100
Dundee City Council	93	£208,920	£2,246
West Lothian Council	88	£1,447,620	£16,450
South Lanarkshire Council	78	£7,800	£100
Inverclyde	71	£7,110	£100
Midlothian	60	£838,675	£13,978
East Ayrshire	57	£260,340	£4,567
East Renfrewshire	52	£5,100	£98
East Lothian	32	£352,905	£11,028
Clackmannanshire Council	30	£237,240	£7,908
Aberdeen City	28	£100,200	£3,579
South Ayrshire	28	£140,775	£5,028
Highland Council	27	£66,050	£2,446
Aberdeenshire	25	£18,300	£732
Perth & Kinross	24	£182,670	£7,611
Angus	20	£47,215	£2,361
North Ayrshire	19	£76,850	£4,045
Argyll & Bute	13	£14,950	£1,150
Scottish Borders Council	9	£20,780	£2,309
Dumfries & Galloway Council	6	£5,150	£858
Moray	5	£13,050	£2,610
East Dunbartonshire	4	£19,175	£4,794
West Dunbartonshire	3	£19,900	£6,633
Orkney Islands Council	2	£190	£95
Shetland Islands Council	1	£0	£0
Comhairle nan Eilean Siar	1	£125	£125
Total	2,199	£12,697,970	£5,774

Glasgow City Council said the prevalence of derelict land was “due to the sheer scale of industrial land and activity” from the city’s past and that some sites had been brought “back to productive use” over the last decade. Glasgow City Assessors said the 624 sites it had rated were currently “of little or no rateable value”. 

But Wightman, a former Scottish Green MSP who now sits as an independent, said: “Vacant or derelict land is still land – a finite resource. We need to make the best use of every last hectare if we are to tackle the climate, housing and biodiversity crises.

“At a time when every penny counts for local authorities, our archaic tax system means many councils are missing out on substantial revenue.”

He added: “The way in which we tax vacant land also needs a rethink. It’s long past time for a genuine tax on the real value of land.”

A recent report for the Scottish Government’s Scottish Land Commission found that undertaxing land “encourages landowners to use land inefficiently as developed properties face higher tax burdens than vacant land”.

The Scottish Conservative’s infrastructure spokesman, Graham Simpson MSP, said that Glasgow had “far too many derelict sites” and that “a lack of charging to absentee owners is going to do nothing to accelerate more sites becoming available for use.”

He added: “Compared to other councils, Glasgow City Council appear to be dragging their heels on collecting vital revenue funds.”

The largest 10 vacant and derelict sites in Scotland

Glasgow’s neighbouring West Dunbartonshire was due £19,900 – more than double that of the city – from just three derelict sites. Other local authorities were set to bring in millions in tax from derelict landowners, despite playing host to far fewer sites than Glasgow.

Edinburgh was due more than £5.5 million from 144 properties, the largest total tax take by far and an average of £38,438 per site.

The capital was followed by Fife, with 171 sites valued at nearly £2m, and West Lothian, with 88 sites valued at nearly £1.45m. On average, each of Scotland’s 32 local authorities had 69 derelict sites valued at £5,774 each.

The SAA said that its systems are not specifically set up to gather vacant and derelict land data and that definitions of such sites varied between regional assessors. However, the assessor’s organisation claimed it was “taking steps to seek to improve our land classification system”.

As assessors do not survey all land on an ongoing basis, some derelict sites can be missed, said a spokesman.

For example a warehouse may be listed as occupied, but have become vacant and later derelict over time, due to factors like vandalism.

At a time when every penny counts for local authorities, our archaic tax system means many councils are missing out on substantial revenue.

Andy Wightman MSP

It was common for assessors to tax nothing to derelict landowners when they believed that “a hypothetical tenant would not be prepared to offer a rent to occupy”, the spokesperson added.

They claimed Scotland’s industrial areas have significant areas of contaminated land that are “unlikely to return to use for a considerable period of time”.

In October, Glasgow City Council said that £2.3 million in funding from the Scottish Government’s Vacant and Derelict Land Fund would help to bring around 61 hectares of land back to productive use.

Plans to do so included improvement and decontamination of former brownfield and industrial sites, new and enhanced greenspaces in deprived areas, and developing sites for food growing.

With 954 hectares, Glasgow “had the highest concentration” of derelict land of any local authority, “with much of this land in the North and East of the city”, according to a council news release.

‘Left behind and ignored’ – Glasgow’s derelict buildings

But the council stressed that continued progress had been made in tackling the issue. The city’s derelict land had been reduced by 5.1 per cent since 2018, which the council said was equivalent to 71 football pitches.

It claimed about 66 per cent of the land brought back to use between 2018 and 2019 featured new housing, including 750 homes built through the council’s Affordable Housing Supply Programme.

“On the issue of tackling vacant and derelict sites, Glasgow has a greater share of this than other areas of Scotland due to the sheer scale of industrial land and activity that existed/occurred in the city’s past”, a spokesperson told The Ferret.

“Over the past decade, our efforts to bring such land/sites back to productive use has seen a significant decline in both the number of such sites and the overall scale of vacant land in Glasgow, with each successive year witnessing a fall in these numbers.”

The Ferret later put criticism from Graham Simpson and Andy Wightman to the council about the loss of potential tax revenue from its derelict sites, but did not receive a response by the time of publication.

Inefficient land use

The 2019 Scottish Vacant and Derelict Land Survey survey found 3,954 sites totalling 11,234 hectares – a slight reduction in the overall amount of derelict land in 2018.

A third of Scotland’s population are thought to be living within 500 meters of a derelict site – a result of Scotland’s industrial legacy. In deprived areas, this figure increased to 58 per cent.

Derelict sites are often a source of great frustration to local communities – recent Ferret coverage detailed local anger over derelict sites in Glasgow and in Dumfries and Galloway.

‘An awful way to welcome visitors’: Dumfries and Galloway’s derelict buildings

In December 2020, a report into land and property taxation, prepared for the Scottish Land Commission (SLC) by Alma Economics found that while a large proportion of derelict sites were suitable for redevelopment, just eight per cent are re-used annually.

The report found that assessors charge “reduced or zero rates on unused or undeveloped land” while charging relatively more to developed properties. This “encourages landowners to use land inefficiently”.

Internationally, a number of major cities have implemented higher tax rates on vacant sites to encourage re-use, it said. Other governments use a system which reduces the relative tax penalty on development, thereby reducing land speculation.

Tax credits can also be issued for regenerating brownfield sites, which require significant investment before being able to be developed, the report found.

This is “similar to the existing Land Remediation Relief programme in the UK”, which has “been successful in encouraging investment into derelict sites.”

A land value tax would incentivise derelict land development, the report claimed.

However, it also warned that taxing land facing development barriers would “unfairly punish owners” and encourage them to sell rather than invest in development.

In a 2018 review of Scottish derelict land, a lack of redevelopment was linked to low market demand and land value expectations, and increased regeneration costs.

The SLC has previously called on the Scottish Government to introduce a compulsory sales order (CSO) for councils to auction long-neglected land and buildings for regeneration.

This policy was part of the SNP’s 2016 election manifesto but the government last year admitted the power would not be delivered in the current parliamentary term.

Plan to ‘transform’

However, there have been other developments. On 19 December, the government announced £50m to help bring thousands of hectares of derelict land back into use over the next five years.

The funding aims to help to tackle climate change by providing low carbon, quality, affordable housing and commercial and industrial developments, greenspaces, flood prevention measures and community renewables projects, the government said.

Communities Secretary Aileen Campbell MSP said that Scotland’s derelict land “offers significant potential to be brought back to positive use to the benefit of communities.

“By prioritising such sites, and protecting our existing natural capital, we will ensure that future infrastructure investment goes into areas where it is needed the most”.

The government’s announcement followed recommendations from the Vacant and Derelict Land Taskforce, established by the SLC and the Scottish Environment Protection Agency in 2018 to bring derelict land back into productive use.

Chair of the taskforce and the SLC, Andrew Thin, stressed that land management was “central to achieving Scotland’s targets for climate change, wellbeing and the economy”.

He said: “Scotland’s legacy of derelict land reaches into all communities, but these sites could provide much needed greenspace, growing space, community facilities, housing or businesses.”

Scotland must “ensure that it is no longer acceptable to allow land to fall into long term disrepair”, Thin stressed.

He added: “Those communities that are most affected by derelict land are also those that have been hardest hit by Covid-19.

“Seeing urban land as a reusable resource, one that can be brought back into viable life to the betterment of local communities and the wider economy will help to create a greener and fairer recovery for Scotland.”

Header image thanks to Richard Sutcliffe, used under the Creative Commons License

This story was published in tandem with the Sunday National.