She’s making a list, she’s checking it twice…

…and she found she’d left the electrician off it!

Yes, we’ve reached the planning stage.  This is a list (not quite in the right order) of all the stuff we think we have to do to Ethel’s House.

  1. Treat woodworm.
  2. Strip all rooms back to walls.
  3. Repair kitchen ceiling.
  4. Re-wire house.
  5. Enlarge fireplace in living room to take woodburner.
  6. Replace windows.
  7. Replace front door.
  8. Replace roof and all rainwater goods.
  9. Repair chimney.
  10. Enlarge two existing roof lights and add two more.
  11. Insulate all rooms and roof.
  12. Install underfloor heating in kitchen and bathroom.
  13. Install new kitchen.
  14. Install new shower.
  15. Lay solid wood flooring throughout ground floor.
  16. Carpet up the stairs and throughout upstairs landing and bedrooms.
  17. Install woodburner in living room.
  18. Decorate throughout.
  19. Furnish.

Just a bit of work to do, then…  We are really dependent on the electrician and the roofer, as a lot of the rest can’t be done until they’ve finished.  By the time we’ve got it furnished, hopefully the decrofting of the house site will have come through and I’ll be able to get it revalued and apply for a small mortgage to pay off all the money I’ll be borrowing to pay for the list above.  At the moment I have a home report that says it’s worth £77,500.  Compared to other 3-bed near-identical houses in the village currently for sale, that’s very, very low – although all those came to market after the home report was done.  Given there’s a 2-bed bungalow with no land 200 yards up the road that’s been valued at £125,000, I think we should do okay when it comes to getting a good low loan-to-value.

A fun little quiz

Country Life magazine has set up this fun little Christmas quiz – look at a picture of a house, its location and the year it was advertised in Country Life and guess which of three prices it was advertised at.

I got six out of thirteen – weirdly I got the first four right, which were all in the ’80s (I was born in 1975, so not really taking much of an interest in the housing market at that time!) and then tailed off badly as it moved into the ’90s and 2000s!

Get set…

So I won’t be getting the keys for Christmas, but I’m a gigantic step closer – my solicitor has just emailed to say that the final query has been resolved and if I’m happy, then she is happy to issue the letter concluding missives.  (If you’re unfamiliar with the Scottish house-buying system, concluding missives means that you’ve bought it – you cannot now back out of the transaction without incurring very heavy financial penalties.)

All that needs to happen now is for the executor to sign the transfer paperwork and for the Crofting Commission to confirm acceptance of the transfer and put me on the Crofting Register as the tenant.  Hopefully we should be done and dusted some time next month and then the real work begins!

3% levy on second homes


Well, I was feeling slightly smug for a few weeks about Scotland not being affected by the 3% surcharge for buying a second home that was announced in the Autumn Statement, but despite the SNP’s avowed loathing of Westminster, they’ve not hesitated in going, ‘Oh, that’s a good idea,’ and doing exactly the same for LBTT (Land and Building Transactions Tax, our version of stamp duty).

Scottish Budget: New 3% levy for buying second homes

I’m really not sure what the recent flurry of legislation affecting landlords is supposed to do, other than reduce the amount of rental stock, thus pushing rents up.  Anyway, if my purchase looks like it’s going to get anywhere close to not completing by the date this comes in (unlikely, but then I thought I’d be six weeks into renovations by now!), I shall be strongly suggesting that the seller pays it.

Holiday letting – council tax or business rates?


No, sorry, I still haven’t bought the house!  I did email my solicitor last Monday to find out if there was a chance of getting the keys before Christmas, but haven’t had a reply yet, so hopefully that’s still a ‘Maybe’ rather than a ‘No’!

However, what I have been doing is looking into some of the things that are going to affect how much I earn from my holiday cottage and one of the main things I was a bit confused about is whether a holiday letting property is subject to council tax or business rates.

Disclaimer – I am not an expert and the below might be wrong!

From what I can figure out, and please remember that I’m looking specifically at the law for Scotland here, it all boils down to how many days the house is available for and how many it’s actually let for.  The Scottish Government website is actually very helpful on the subject if you do a bit of digging.  So, on this page, it says that if my holiday cottage is available to let for 140 days a year or more (which it will be – that’s only 20 weeks), then it will be rated as a self-catering property and liable to business rates.

The next burning question I wanted answered was how much is it going to cost me?  Given that the council tax for our house is £113 a month (which does include water rates), I was pretty sure it was going to be more.  I dug further and discovered that the local assessor will give me a rateable value for the house upon which I then have to pay the poundage rate, which for 2015/16 is 48p in the pound.  At this point I was getting slightly worried – was that related to the value of the house?  Surely they couldn’t be expecting me to fork out tens of thousands a year?

Fortunately not.  I then found this EXTREMELY useful document on how ratable values for self-catering cottages (or castles!) are worked out.  It’s dated 2004, so I’m not sure if the values are still in use, but it gives me some idea and based on the house sleeping 5, done to an H1 standard, and being in a remote (P) location, that would give us a ratable value of £1,025 – and that roughly tallies with the information I found on the SAA website that a 2-bed holiday cottage on the other side of the bay has a rateable value of £800..  So 48p in the pound means £492 a year in business rates, way lower than council tax.  Result!

Then it got even better.  It turns out that the Highland Council has something called the Small Business Bonus Scheme, which, if I understand it correctly, means that businesses with a total ratable value of up to £10,000 get 100% relief from rates – so I will pay nothing at all!

However, business rates don’t include water or refuse collection and I’ve been struggling to find out what I’ll have to pay for those.  I’ve found an old PDF on the Highland Council website which seems to suggest that for a normal domestic 240l wheelie bin collected from household premises in 2010/11, it was £3.43+VAT per collection for a refuse bin and £1.64+VAT per collection for a recycling bin, but I can only see current prices if I apply for a collection. I am completely flummoxed by what happens about the water, I think I’ll have to ring up Scottish Water and ask!  All in all, it does look like I’m going to be better off on business rates.