What’s changing – and why it matters for second‑home owners

A second home is defined as a furnished property used for at least 25 days per year. From 1 April 2026, councils across Scotland will be able to apply significantly increased Council Tax premiums specifically to second homes. Edinburgh has confirmed a 300% premium, while surrounding authorities such as Midlothian (200–600%), the Scottish Borders (225%) and Highland (300%) have also adopted substantial increases.

Although these higher premiums may materially increase annual holding costs for affected owners, second homes represent only around 1.5% of Edinburgh’s total housing stock. As a result, while the changes are highly relevant for individual owners and investors, their effect on the city’s overall supply‑demand balance is expected to be limited.

Prime sales: confidence returning in one of the UK’s strongest markets

Much of the adjustment in values took place during 2025, and the market has entered 2026 on firmer footing. Clarity on the second‑home Council Tax changes – alongside wider fiscal stability – has helped remove a layer of uncertainty for prime buyers.

We are now seeing steady, well‑qualified buyer engagement. This is not an overheated surge but a confident, discerning market where purchasers feel they understand the landscape and are prepared to act when pricing is accurate. Established neighbourhoods such as the New Town, Grange, Morningside and Inverleith continue to generate strong interest when realistically valued.

Why Edinburgh continues to outperform

Edinburgh’s economic fundamentals remain exceptionally strong. The city recorded the highest GDP per head in the UK at £69,809, ahead of London, and continues to post an employment rate of 82.1%, one of the strongest nationally. It attracts a disproportionate share of foreign direct investment projects, reinforcing its global pull and access to a highly skilled workforce. These factors sustain deep, resilient demand from senior professionals, returning expats, corporate relocators and internationally mobile households.

A brief note on lettings

While my focus is sales, our lettings colleagues continue to report extremely strong prime rental demand, supported by the same international, professional and academic inflows driving the sales market. Although increased premiums may encourage some second homes back into more regular use, the scale is modest and unlikely to materially ease conditions in the prime rental sector.

What this means for second‑home owners in 2026

For sellers and owners of second homes, the landscape is clearer than it has been for some time. The second‑home Council Tax changes provide definition rather than disruption, helping owners make more informed decisions. Edinburgh continues to outperform most other UK markets, with strong fundamentals, tight supply and deep – though increasingly price‑sensitive – demand.

As someone embedded in the city, personally and professionally, I will continue to monitor and share insights as the market adapts over the months ahead.

Further information

Contact Faisal Choudhry and Luke Kearns