A proposed 7.3% increase in council tax for the 2026/27 financial year could see households paying an extra £1.95 per week, though the final decision rests with councillors.
The proposal, outlined in a report set for the policy and resources committee on Thursday and full council next week, would generate an additional £921,000 in revenue for the Shetland Islands Council (SIC). Despite the rise, Shetland would maintain one of the lowest council tax rates in Scotland.
Council tax, a key source of funding for local services, currently brings in £12.6 million annually to the SIC. However, a projected budget deficit of more than £43 million for 2025/26, rising to £45 million in 2026/27, has prompted the proposed increase.
The rise follows a 10% increase in the current financial year, introduced to help stabilise council finances, after a 2024/25 freeze incentivised by the Scottish Government. More than 300 responses were received during a recent public consultation on council tax.
In addition to council tax, a 7.5% increase in council house rents has been proposed to cover operating costs and support planned capital investments. Revenue from rent is ring-fenced in the SIC housing account and is exclusively used to provide tenant services.
The full council will meet next Wednesday to set the 2026/27 budget and confirm the final tax and rent rates.